Spencer's Retail Limited: Repositioning in a Changing Retail Environment SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Spencer's Retail Limited: Repositioning in a Changing Retail Environment
To target the expanding segment of upwardly mobile and upper-income Indians, a pre-eminent organized retailer in India decided to introduce Western-style hyperstores with high-end merchandising. The initial reactions of shoppers were positive, but soon the novelty wore off and store traffic declined. To counter the negative consumer responses, the retailer undertook a year-long test of a new repositioning strategy in its signature hyperstore in a large urban centre. The key challenge was to increase the store's traffic and profitability without jeopardizing its distinctive and high-quality upscale image. The case provides the test results, which include consumer reactions as well as impacts on store traffic and profit margins. Author Tridib Mazumdar is affiliated with Syracuse University-Whitman School of Management. Author Mohua Banerjee is affiliated with International Management Institute, Kolkata.
Swot Analysis of "Spencer's Retail Limited: Repositioning in a Changing Retail Environment" written by Tridib Mazumdar, Mohua Banerjee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Traffic Repositioning facing as an external strategic factors. Some of the topics covered in Spencer's Retail Limited: Repositioning in a Changing Retail Environment case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Spencer's Retail Limited: Repositioning in a Changing Retail Environment casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, technology disruption, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, geopolitical disruptions, increasing transportation and logistics costs,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, etc
Introduction to SWOT Analysis of Spencer's Retail Limited: Repositioning in a Changing Retail Environment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Spencer's Retail Limited: Repositioning in a Changing Retail Environment case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Traffic Repositioning, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Traffic Repositioning 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 Spencer's Retail Limited: Repositioning in a Changing Retail Environment can be done for the following purposes –
1. Strategic planning using facts provided in Spencer's Retail Limited: Repositioning in a Changing Retail Environment case study
2. Improving business portfolio management of Traffic Repositioning
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 Traffic Repositioning
Strengths Spencer's Retail Limited: Repositioning in a Changing Retail Environment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Traffic Repositioning in Spencer's Retail Limited: Repositioning in a Changing Retail Environment Harvard Business Review case study are -
Highly skilled collaborators
– Traffic Repositioning 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 Spencer's Retail Limited: Repositioning in a Changing Retail Environment HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Traffic Repositioning has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Traffic Repositioning
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Traffic Repositioning does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Traffic Repositioning has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Traffic Repositioning 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.
High brand equity
– Traffic Repositioning has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Traffic Repositioning to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Spencer's Retail Limited: Repositioning in a Changing Retail Environment 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.
Training and development
– Traffic Repositioning has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Spencer's Retail Limited: Repositioning in a Changing Retail Environment 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.
Strong track record of project management
– Traffic Repositioning is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Sales & Marketing field
– Traffic Repositioning is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Traffic Repositioning in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Traffic Repositioning 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 Tridib Mazumdar, Mohua Banerjee 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.
Superior customer experience
– The customer experience strategy of Traffic Repositioning in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Traffic Repositioning in the sector have low bargaining power. Spencer's Retail Limited: Repositioning in a Changing Retail Environment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Traffic Repositioning to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Spencer's Retail Limited: Repositioning in a Changing Retail Environment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Spencer's Retail Limited: Repositioning in a Changing Retail Environment are -
Capital Spending Reduction
– Even during the low interest decade, Traffic Repositioning 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 operating costs
– Compare to the competitors, firm in the HBR case study Spencer's Retail Limited: Repositioning in a Changing Retail Environment 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 Traffic Repositioning 's lucrative customers.
Interest costs
– Compare to the competition, Traffic Repositioning 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Spencer's Retail Limited: Repositioning in a Changing Retail Environment, it seems that the employees of Traffic Repositioning don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High cash cycle compare to competitors
Traffic Repositioning 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Spencer's Retail Limited: Repositioning in a Changing Retail Environment HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Traffic Repositioning has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Tridib Mazumdar, Mohua Banerjee suggests that, Traffic Repositioning is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Workers concerns about automation
– As automation is fast increasing in the segment, Traffic Repositioning needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Traffic Repositioning is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Traffic Repositioning needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Traffic Repositioning to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Traffic Repositioning 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Spencer's Retail Limited: Repositioning in a Changing Retail Environment, in the dynamic environment Traffic Repositioning has struggled to respond to the nimble upstart competition. Traffic Repositioning has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Spencer's Retail Limited: Repositioning in a Changing Retail Environment | 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 Spencer's Retail Limited: Repositioning in a Changing Retail Environment are -
Manufacturing automation
– Traffic Repositioning 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.
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 Traffic Repositioning 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.
Developing new processes and practices
– Traffic Repositioning 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.
Buying journey improvements
– Traffic Repositioning can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Spencer's Retail Limited: Repositioning in a Changing Retail Environment 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.
Creating value in data economy
– The success of analytics program of Traffic Repositioning has opened avenues for new revenue streams for the organization in the industry. This can help Traffic Repositioning to build a more holistic ecosystem as suggested in the Spencer's Retail Limited: Repositioning in a Changing Retail Environment case study. Traffic Repositioning can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Traffic Repositioning can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Traffic Repositioning 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Traffic Repositioning can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Traffic Repositioning 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.
Loyalty marketing
– Traffic Repositioning 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.
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 Traffic Repositioning in the consumer business. Now Traffic Repositioning can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Traffic Repositioning has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Spencer's Retail Limited: Repositioning in a Changing Retail Environment - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Traffic Repositioning to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Traffic Repositioning to increase its market reach. Traffic Repositioning 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.
Threats Spencer's Retail Limited: Repositioning in a Changing Retail Environment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Spencer's Retail Limited: Repositioning in a Changing Retail Environment are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Traffic Repositioning 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 Spencer's Retail Limited: Repositioning in a Changing Retail Environment .
Increasing wage structure of Traffic Repositioning
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Traffic Repositioning.
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. Traffic Repositioning needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Traffic Repositioning 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.
Regulatory challenges
– Traffic Repositioning 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Traffic Repositioning with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Spencer's Retail Limited: Repositioning in a Changing Retail Environment, Traffic Repositioning 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 .
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 Traffic Repositioning business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Traffic Repositioning 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.
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.
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 Traffic Repositioning in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Traffic Repositioning has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Traffic Repositioning needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Traffic Repositioning 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.
Weighted SWOT Analysis of Spencer's Retail Limited: Repositioning in a Changing Retail Environment 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 Spencer's Retail Limited: Repositioning in a Changing Retail Environment 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 Spencer's Retail Limited: Repositioning in a Changing Retail Environment 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 Spencer's Retail Limited: Repositioning in a Changing Retail Environment 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 Spencer's Retail Limited: Repositioning in a Changing Retail Environment 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 Traffic Repositioning needs to make to build a sustainable competitive advantage.