American Well: The DTC Decision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of American Well: The DTC Decision
In late 2013, telehealth company American Well, which developed a digital platform that allowed patients to conduct online medical consultations with physicians, is considering pursuing a direct-to-consumer (DTC) strategy. Founded in 2006, American Well had, to date, primarily sold its solution to health plans, which then provided online care services to their members using their own brand name. But while American Well attracted some of the largest U.S. health insurers as clients, a surprisingly small number of individual members had actually used the online care service. American Well management believed low consumer awareness-the result of insufficient marketing by health plans, among other factors-was hampering uptake of what should be a highly valuable offering for all stakeholders involved. They wondered if a DTC approach, in which American Well would become a consumer brand and market a telehealth service directly to the public, for example through a mobile app, could drive utilization and catapult the business to the next level. If a DTC offering were given the green light, the company had to come up with a coherent marketing plan to launch it and figure out how to manage potential conflicts with existing clients, who might view the move as competing with their own telehealth efforts. Moreover, the move had to be considered in light of other initiatives the company had recently embarked on, such as marketing its platform to pharmacy chains, targeting large employers, and selling kiosks that provided a physical space to conduct online consultations. The case forces students to grapple with the challenges and barriers involved in disrupting an established industry, examine alternative go-to-market strategies and the timing of implementing them, and consider different business models to manage supply and generate revenues. The case also offers a rich analysis of digital marketing issues.
Swot Analysis of "American Well: The DTC Decision" written by Elie Ofek, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dtc Telehealth facing as an external strategic factors. Some of the topics covered in American Well: The DTC Decision case study are - Strategic Management Strategies, Entrepreneurship, Health, Marketing, Technology and Sales & Marketing.
Some of the macro environment factors that can be used to understand the American Well: The DTC Decision casestudy better are - – increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing household debt because of falling income levels, wage bills are increasing, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation,
cloud computing is disrupting traditional business models, technology disruption, etc
Introduction to SWOT Analysis of American Well: The DTC Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in American Well: The DTC Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dtc Telehealth, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dtc Telehealth 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 American Well: The DTC Decision can be done for the following purposes –
1. Strategic planning using facts provided in American Well: The DTC Decision case study
2. Improving business portfolio management of Dtc Telehealth
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 Dtc Telehealth
Strengths American Well: The DTC Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dtc Telehealth in American Well: The DTC Decision Harvard Business Review case study are -
Strong track record of project management
– Dtc Telehealth is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Dtc Telehealth is present in almost all the verticals within the industry. This has provided firm in American Well: The DTC Decision 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.
Effective Research and Development (R&D)
– Dtc Telehealth 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 American Well: The DTC Decision - 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
– Dtc Telehealth has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dtc Telehealth 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.
Superior customer experience
– The customer experience strategy of Dtc Telehealth in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Sales & Marketing industry
– American Well: The DTC Decision firm has clearly differentiated products in the market place. This has enabled Dtc Telehealth to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Dtc Telehealth to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Dtc Telehealth 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.
Cross disciplinary teams
– Horizontal connected teams at the Dtc Telehealth 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.
Innovation driven organization
– Dtc Telehealth is one of the most innovative firm in sector. Manager in American Well: The DTC Decision Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Dtc Telehealth digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dtc Telehealth 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.
Training and development
– Dtc Telehealth has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in American Well: The DTC Decision 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.
Ability to recruit top talent
– Dtc Telehealth is one of the leading recruiters in the industry. Managers in the American Well: The DTC Decision are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses American Well: The DTC Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of American Well: The DTC Decision are -
Low market penetration in new markets
– Outside its home market of Dtc Telehealth, firm in the HBR case study American Well: The DTC Decision needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As American Well: The DTC Decision HBR case study mentions - Dtc Telehealth 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.
No frontier risks strategy
– After analyzing the HBR case study American Well: The DTC Decision, 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 American Well: The DTC Decision, in the dynamic environment Dtc Telehealth has struggled to respond to the nimble upstart competition. Dtc Telehealth has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study American Well: The DTC Decision, it seems that the employees of Dtc Telehealth 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dtc Telehealth is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study American Well: The DTC Decision can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Dtc Telehealth has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Dtc Telehealth 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.
Slow decision making process
– As mentioned earlier in the report, Dtc Telehealth 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. Dtc Telehealth 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.
Products dominated business model
– Even though Dtc Telehealth 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 - American Well: The DTC Decision should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Dtc Telehealth is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Dtc Telehealth needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dtc Telehealth to focus more on services rather than just following the product oriented approach.
Opportunities American Well: The DTC Decision | 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 American Well: The DTC Decision are -
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 Dtc Telehealth in the consumer business. Now Dtc Telehealth 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. Dtc Telehealth 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
– Dtc Telehealth 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.
Buying journey improvements
– Dtc Telehealth can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. American Well: The DTC Decision 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.
Using analytics as competitive advantage
– Dtc Telehealth 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 American Well: The DTC Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dtc Telehealth to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Dtc Telehealth 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dtc Telehealth is facing challenges because of the dominance of functional experts in the organization. American Well: The DTC Decision 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.
Leveraging digital technologies
– Dtc Telehealth 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.
Building a culture of innovation
– managers at Dtc Telehealth 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dtc Telehealth 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dtc Telehealth can use these opportunities to build new business models that can help the communities that Dtc Telehealth operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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 Dtc Telehealth 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.
Loyalty marketing
– Dtc Telehealth 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 American Well: The DTC Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study American Well: The DTC Decision are -
Technology acceleration in Forth Industrial Revolution
– Dtc Telehealth has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Dtc Telehealth 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.
Regulatory challenges
– Dtc Telehealth 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dtc Telehealth 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 American Well: The DTC Decision .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study American Well: The DTC Decision, Dtc Telehealth 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dtc Telehealth with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Dtc Telehealth in the Sales & Marketing sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Dtc Telehealth 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.
Shortening product life cycle
– it is one of the major threat that Dtc Telehealth is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Dtc Telehealth 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. Dtc Telehealth can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dtc Telehealth 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.
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 Dtc Telehealth.
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. Dtc Telehealth 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.
Weighted SWOT Analysis of American Well: The DTC Decision 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 American Well: The DTC Decision 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 American Well: The DTC Decision 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 American Well: The DTC Decision 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 American Well: The DTC Decision 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 Dtc Telehealth needs to make to build a sustainable competitive advantage.
