Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version
In November 2004, The Wall Street Journal reported that consumer electronics retailer Best Buy's new customer approach was to shun the "devils" among its customers. The "customer centricity" initiative, which was led by Best Buy's CEO Brad Anderson, was based on an analysis of the purchase histories of several customer groups. The central idea was to revamp stores according to the most lucrative types of customers they served--the "angels" among the company's customers. Encourages an assessment of Best Buy's strategy and, more generally, of the challenges and opportunities in managing customers for profits.
Authors :: Anita Elberse, John T. Gourville, Das Narayandas
Swot Analysis of "Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version" written by Anita Elberse, John T. Gourville, Das Narayandas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Buy's Devils facing as an external strategic factors. Some of the topics covered in Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version case study are - Strategic Management Strategies, Customers, Growth strategy, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version casestudy better are - – central banks are concerned over increasing inflation, technology disruption, challanges to central banks by blockchain based private currencies, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels,
increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, etc
Introduction to SWOT Analysis of Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Buy's Devils, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Buy's Devils 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version case study
2. Improving business portfolio management of Buy's Devils
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 Buy's Devils
Strengths Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Buy's Devils in Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Buy's Devils digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Buy's Devils has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Buy's Devils in the sector have low bargaining power. Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Buy's Devils to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Sales & Marketing industry
– Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version firm has clearly differentiated products in the market place. This has enabled Buy's Devils to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Buy's Devils to invest into research and development (R&D) and innovation.
High brand equity
– Buy's Devils has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Buy's Devils to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Buy's Devils 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Buy's Devils 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.
Ability to recruit top talent
– Buy's Devils is one of the leading recruiters in the industry. Managers in the Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Buy's Devils 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Buy's Devils has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Buy's Devils 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.
Innovation driven organization
– Buy's Devils is one of the most innovative firm in sector. Manager in Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Buy's Devils has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version 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.
Analytics focus
– Buy's Devils 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 Anita Elberse, John T. Gourville, Das Narayandas 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.
Weaknesses Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version are -
Low market penetration in new markets
– Outside its home market of Buy's Devils, firm in the HBR case study Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Buy's Devils is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Buy's Devils needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Buy's Devils to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Buy's Devils products
– To increase the profitability and margins on the products, Buy's Devils needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version 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 Buy's Devils 's lucrative customers.
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 Buy's Devils supply chain. Even after few cautionary changes mentioned in the HBR case study - Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Buy's Devils vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Buy's Devils 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 cash cycle compare to competitors
Buy's Devils 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version HBR case study mentions - Buy's Devils 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version can leverage the sales team experience to cultivate customer relationships as Buy's Devils is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version, is just above the industry average. Buy's Devils needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
No frontier risks strategy
– After analyzing the HBR case study Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version, 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.
Opportunities Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version | 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version are -
Building a culture of innovation
– managers at Buy's Devils can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
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. Buy's Devils can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Buy's Devils can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Buy's Devils can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Buy's Devils to increase its market reach. Buy's Devils 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.
Leveraging digital technologies
– Buy's Devils 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.
Learning at scale
– Online learning technologies has now opened space for Buy's Devils 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.
Creating value in data economy
– The success of analytics program of Buy's Devils has opened avenues for new revenue streams for the organization in the industry. This can help Buy's Devils to build a more holistic ecosystem as suggested in the Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version case study. Buy's Devils can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Buy's Devils in the consumer business. Now Buy's Devils can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Buy's Devils can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Buy's Devils 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.
Developing new processes and practices
– Buy's Devils can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Buy's Devils 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Buy's Devils is facing challenges because of the dominance of functional experts in the organization. Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version 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.
Threats Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version are -
Regulatory challenges
– Buy's Devils 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.
Stagnating economy with rate increase
– Buy's Devils 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.
High dependence on third party suppliers
– Buy's Devils high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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 Buy's Devils business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Buy's Devils 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.
Consumer confidence and its impact on Buy's Devils 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.
Shortening product life cycle
– it is one of the major threat that Buy's Devils is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Buy's Devils can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version, Buy's Devils 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 .
Environmental challenges
– Buy's Devils needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Buy's Devils can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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. Buy's Devils 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.
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.
Weighted SWOT Analysis of Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version 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 Angels and Devils: Best Buy's New Customer Approach (A), Spanish Version 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 Buy's Devils needs to make to build a sustainable competitive advantage.
