Case Study Description of Shiva Tourist Dhaba: Managing Customer Loyalty
In 2014, the owner of Shiva Tourist Dhaba, a highway restaurant specializing in authentic Indian cuisine, faced a pressing decision. The business had been successful since opening in 1995, but it now faced intense competition. The owner was working with a marketing research team in pursuit of two objectives: to gain insight into customer loyalty and to decide on his restaurant's positioning strategy. After conducting a survey of restaurant customers, the marketing research team needed to determine the tool that would best analyze the data to help resolve the issues facing the restaurant owner. Madhurima Deb is affiliated with Indian Institute of Management Kashipur. Gautam Sinha is affiliated with Indian Institute of Technology Kharagpur.
Swot Analysis of "Shiva Tourist Dhaba: Managing Customer Loyalty" written by Madhurima Deb, Guatam Sinha includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dhaba Shiva facing as an external strategic factors. Some of the topics covered in Shiva Tourist Dhaba: Managing Customer Loyalty case study are - Strategic Management Strategies, Financial analysis, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Shiva Tourist Dhaba: Managing Customer Loyalty casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion,
geopolitical disruptions, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Shiva Tourist Dhaba: Managing Customer Loyalty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shiva Tourist Dhaba: Managing Customer Loyalty case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dhaba Shiva, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dhaba Shiva operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Shiva Tourist Dhaba: Managing Customer Loyalty can be done for the following purposes –
1. Strategic planning using facts provided in Shiva Tourist Dhaba: Managing Customer Loyalty case study
2. Improving business portfolio management of Dhaba Shiva
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dhaba Shiva
Strengths Shiva Tourist Dhaba: Managing Customer Loyalty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dhaba Shiva in Shiva Tourist Dhaba: Managing Customer Loyalty Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Shiva Tourist Dhaba: Managing Customer Loyalty Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Dhaba Shiva has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Shiva Tourist Dhaba: Managing Customer Loyalty HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Dhaba Shiva is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Dhaba Shiva has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shiva Tourist Dhaba: Managing Customer Loyalty Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Dhaba Shiva has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Shiva Tourist Dhaba: Managing Customer Loyalty - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Dhaba Shiva has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dhaba Shiva has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Dhaba Shiva in the sector have low bargaining power. Shiva Tourist Dhaba: Managing Customer Loyalty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dhaba Shiva to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Dhaba Shiva are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Dhaba Shiva in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Dhaba Shiva is present in almost all the verticals within the industry. This has provided firm in Shiva Tourist Dhaba: Managing Customer Loyalty case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Dhaba Shiva is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Madhurima Deb, Guatam Sinha can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Sales & Marketing industry
– Shiva Tourist Dhaba: Managing Customer Loyalty firm has clearly differentiated products in the market place. This has enabled Dhaba Shiva to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Dhaba Shiva to invest into research and development (R&D) and innovation.
Weaknesses Shiva Tourist Dhaba: Managing Customer Loyalty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shiva Tourist Dhaba: Managing Customer Loyalty are -
Increasing silos among functional specialists
– The organizational structure of Dhaba Shiva is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Dhaba Shiva needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dhaba Shiva to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Dhaba Shiva has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As Shiva Tourist Dhaba: Managing Customer Loyalty HBR case study mentions - Dhaba Shiva takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study Shiva Tourist Dhaba: Managing Customer Loyalty that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Shiva Tourist Dhaba: Managing Customer Loyalty can leverage the sales team experience to cultivate customer relationships as Dhaba Shiva is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Shiva Tourist Dhaba: Managing Customer Loyalty has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Dhaba Shiva 's lucrative customers.
Interest costs
– Compare to the competition, Dhaba Shiva has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Dhaba Shiva has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Dhaba Shiva has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Dhaba Shiva supply chain. Even after few cautionary changes mentioned in the HBR case study - Shiva Tourist Dhaba: Managing Customer Loyalty, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dhaba Shiva vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Shiva Tourist Dhaba: Managing Customer Loyalty, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Shiva Tourist Dhaba: Managing Customer Loyalty, in the dynamic environment Dhaba Shiva has struggled to respond to the nimble upstart competition. Dhaba Shiva has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Shiva Tourist Dhaba: Managing Customer Loyalty | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Shiva Tourist Dhaba: Managing Customer Loyalty are -
Manufacturing automation
– Dhaba Shiva can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dhaba Shiva is facing challenges because of the dominance of functional experts in the organization. Shiva Tourist Dhaba: Managing Customer Loyalty case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dhaba Shiva can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Dhaba Shiva to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Dhaba Shiva can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Dhaba Shiva can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dhaba Shiva in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dhaba Shiva to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Dhaba Shiva to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Dhaba Shiva can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shiva Tourist Dhaba: Managing Customer Loyalty suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Dhaba Shiva to increase its market reach. Dhaba Shiva will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Dhaba Shiva to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dhaba Shiva can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Shiva Tourist Dhaba: Managing Customer Loyalty, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Dhaba Shiva has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Shiva Tourist Dhaba: Managing Customer Loyalty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shiva Tourist Dhaba: Managing Customer Loyalty are -
Stagnating economy with rate increase
– Dhaba Shiva can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Dhaba Shiva demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Dhaba Shiva will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Dhaba Shiva needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Dhaba Shiva business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Shiva Tourist Dhaba: Managing Customer Loyalty, Dhaba Shiva may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Shortening product life cycle
– it is one of the major threat that Dhaba Shiva is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dhaba Shiva in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dhaba Shiva with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Dhaba Shiva needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Dhaba Shiva in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Shiva Tourist Dhaba: Managing Customer Loyalty Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Shiva Tourist Dhaba: Managing Customer Loyalty needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Shiva Tourist Dhaba: Managing Customer Loyalty is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Shiva Tourist Dhaba: Managing Customer Loyalty is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Shiva Tourist Dhaba: Managing Customer Loyalty is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Dhaba Shiva needs to make to build a sustainable competitive advantage.
