Indigo Books & Music Inc.: Optimizing Its Loyalty Program SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Indigo Books & Music Inc.: Optimizing Its Loyalty Program
This case allows for a discussion on loyalty programs. How should irewards, a consumer loyalty program, take advantage of the new capabilities promised by Indigo's new customer relationship management (CRM) system. Would adjustments to the pricing structure or the membership discounts be appropriate? Ultimately, how could Indigo ensure that its irewards program was both meaningful to customers and contributed to sales growth? The basis of the irewards program was an annual membership that afforded the member discounts on books. Members were assigned a membership card with a specific number that referred to their account; an annual membership fee was the cost of the program to the customer.
Swot Analysis of "Indigo Books & Music Inc.: Optimizing Its Loyalty Program" written by Kyle Murray, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Irewards Membership facing as an external strategic factors. Some of the topics covered in Indigo Books & Music Inc.: Optimizing Its Loyalty Program case study are - Strategic Management Strategies, Market research, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Indigo Books & Music Inc.: Optimizing Its Loyalty Program casestudy better are - – supply chains are disrupted by pandemic , there is backlash against globalization, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Indigo Books & Music Inc.: Optimizing Its Loyalty Program
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Indigo Books & Music Inc.: Optimizing Its Loyalty Program case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Irewards Membership, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Irewards Membership 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program can be done for the following purposes –
1. Strategic planning using facts provided in Indigo Books & Music Inc.: Optimizing Its Loyalty Program case study
2. Improving business portfolio management of Irewards Membership
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 Irewards Membership
Strengths Indigo Books & Music Inc.: Optimizing Its Loyalty Program | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Irewards Membership in Indigo Books & Music Inc.: Optimizing Its Loyalty Program Harvard Business Review case study are -
Ability to recruit top talent
– Irewards Membership is one of the leading recruiters in the industry. Managers in the Indigo Books & Music Inc.: Optimizing Its Loyalty Program are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Irewards Membership has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Irewards Membership 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.
Highly skilled collaborators
– Irewards Membership 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Irewards Membership
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Irewards Membership does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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.
Innovation driven organization
– Irewards Membership is one of the most innovative firm in sector. Manager in Indigo Books & Music Inc.: Optimizing Its Loyalty Program Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Sales & Marketing field
– Irewards Membership 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 Irewards Membership in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Irewards Membership is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Irewards Membership is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Indigo Books & Music Inc.: Optimizing Its Loyalty Program Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Irewards Membership is present in almost all the verticals within the industry. This has provided firm in Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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.
Training and development
– Irewards Membership has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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.
Low bargaining power of suppliers
– Suppliers of Irewards Membership in the sector have low bargaining power. Indigo Books & Music Inc.: Optimizing Its Loyalty Program has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Irewards Membership to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Irewards Membership 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 Kyle Murray, Ken Mark 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Indigo Books & Music Inc.: Optimizing Its Loyalty Program are -
Slow to strategic competitive environment developments
– As Indigo Books & Music Inc.: Optimizing Its Loyalty Program HBR case study mentions - Irewards Membership 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Kyle Murray, Ken Mark suggests that, Irewards Membership 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.
Interest costs
– Compare to the competition, Irewards Membership 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.
Slow decision making process
– As mentioned earlier in the report, Irewards Membership has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Irewards Membership even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Indigo Books & Music Inc.: Optimizing Its Loyalty Program, it seems that the employees of Irewards Membership 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.
No frontier risks strategy
– After analyzing the HBR case study Indigo Books & Music Inc.: Optimizing Its Loyalty Program, 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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 Irewards Membership 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program can leverage the sales team experience to cultivate customer relationships as Irewards Membership is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Irewards Membership 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
Irewards Membership 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.
Products dominated business model
– Even though Irewards Membership has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Indigo Books & Music Inc.: Optimizing Its Loyalty Program should strive to include more intangible value offerings along with its core products and services.
Opportunities Indigo Books & Music Inc.: Optimizing Its Loyalty Program | 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program are -
Creating value in data economy
– The success of analytics program of Irewards Membership has opened avenues for new revenue streams for the organization in the industry. This can help Irewards Membership to build a more holistic ecosystem as suggested in the Indigo Books & Music Inc.: Optimizing Its Loyalty Program case study. Irewards Membership can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Irewards Membership can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Irewards Membership 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Irewards Membership 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 Irewards Membership to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Irewards Membership can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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.
Manufacturing automation
– Irewards Membership 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.
Loyalty marketing
– Irewards Membership 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.
Building a culture of innovation
– managers at Irewards Membership 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.
Leveraging digital technologies
– Irewards Membership 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.
Developing new processes and practices
– Irewards Membership 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.
Using analytics as competitive advantage
– Irewards Membership 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Irewards Membership to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Irewards Membership can use these opportunities to build new business models that can help the communities that Irewards Membership operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Irewards Membership 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.
Threats Indigo Books & Music Inc.: Optimizing Its Loyalty Program External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Indigo Books & Music Inc.: Optimizing Its Loyalty Program are -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Irewards Membership can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Irewards Membership business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Irewards Membership 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.
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.
Technology acceleration in Forth Industrial Revolution
– Irewards Membership has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Irewards Membership 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Irewards Membership.
Regulatory challenges
– Irewards Membership 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Irewards Membership 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program .
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. Irewards Membership 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.
Environmental challenges
– Irewards Membership 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. Irewards Membership can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing wage structure of Irewards Membership
– 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 Irewards Membership.
Consumer confidence and its impact on Irewards Membership 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Irewards Membership 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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 Indigo Books & Music Inc.: Optimizing Its Loyalty Program 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 Irewards Membership needs to make to build a sustainable competitive advantage.
