Experience! The Finger Lakes: The Groupon Partnership Decision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Experience! The Finger Lakes: The Groupon Partnership Decision
In 2010, Experience! The Finger Lakes (ExperienceFLX), a tour operator offering guided tours and concierge services in the Finger Lakes region of New York State, was at a crossroads. The business was poised for growth, and its owners, Laura and Alan Falk, were considering signing a deal with Groupon, the online coupon firm, to see if a Groupon deal would help the ExperienceFLX bring in new customers. While the prospect of marketing ExperienceFLX's business to a new customer base through Groupon was very appealing, the Falks found that designing a deal that met Groupon's requirements while still allowing ExperienceFLX to make money and without endangering their relationships with area winery partners was a real challenge. The Falks had to decide whether a Groupon deal worked well for them, and if so, how to manage Groupon redemptions by their customers in a way that made financial sense.
Authors :: Lynda M. Applegate, Chekitan S. Dev, Gabriele Piccoli, Arnold B. Peinado
Swot Analysis of "Experience! The Finger Lakes: The Groupon Partnership Decision" written by Lynda M. Applegate, Chekitan S. Dev, Gabriele Piccoli, Arnold B. Peinado includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Groupon Experienceflx facing as an external strategic factors. Some of the topics covered in Experience! The Finger Lakes: The Groupon Partnership Decision case study are - Strategic Management Strategies, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Experience! The Finger Lakes: The Groupon Partnership Decision casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, technology disruption, wage bills are increasing,
increasing government debt because of Covid-19 spendings, there is backlash against globalization, etc
Introduction to SWOT Analysis of Experience! The Finger Lakes: The Groupon Partnership Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Experience! The Finger Lakes: The Groupon Partnership Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Groupon Experienceflx, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Groupon Experienceflx 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 Experience! The Finger Lakes: The Groupon Partnership Decision can be done for the following purposes –
1. Strategic planning using facts provided in Experience! The Finger Lakes: The Groupon Partnership Decision case study
2. Improving business portfolio management of Groupon Experienceflx
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 Groupon Experienceflx
Strengths Experience! The Finger Lakes: The Groupon Partnership Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Groupon Experienceflx in Experience! The Finger Lakes: The Groupon Partnership Decision Harvard Business Review case study are -
Learning organization
- Groupon Experienceflx 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 Groupon Experienceflx is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Experience! The Finger Lakes: The Groupon Partnership Decision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Groupon Experienceflx in the sector have low bargaining power. Experience! The Finger Lakes: The Groupon Partnership Decision has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Groupon Experienceflx to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Groupon Experienceflx is one of the most innovative firm in sector. Manager in Experience! The Finger Lakes: The Groupon Partnership 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 Groupon Experienceflx digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Groupon Experienceflx 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.
Organizational Resilience of Groupon Experienceflx
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Groupon Experienceflx 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
– Groupon Experienceflx has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Groupon Experienceflx 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.
Strong track record of project management
– Groupon Experienceflx is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Groupon Experienceflx 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.
Analytics focus
– Groupon Experienceflx 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 Lynda M. Applegate, Chekitan S. Dev, Gabriele Piccoli, Arnold B. Peinado 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.
Highly skilled collaborators
– Groupon Experienceflx 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 Experience! The Finger Lakes: The Groupon Partnership Decision HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Groupon Experienceflx has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Groupon Experienceflx to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Groupon Experienceflx 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 Experience! The Finger Lakes: The Groupon Partnership 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.
Weaknesses Experience! The Finger Lakes: The Groupon Partnership Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Experience! The Finger Lakes: The Groupon Partnership Decision are -
No frontier risks strategy
– After analyzing the HBR case study Experience! The Finger Lakes: The Groupon Partnership 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.
Need for greater diversity
– Groupon Experienceflx 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.
Slow decision making process
– As mentioned earlier in the report, Groupon Experienceflx 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. Groupon Experienceflx 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Experience! The Finger Lakes: The Groupon Partnership Decision 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 Groupon Experienceflx 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Groupon Experienceflx is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Groupon Experienceflx needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Groupon Experienceflx to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Experience! The Finger Lakes: The Groupon Partnership Decision 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 Groupon Experienceflx has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynda M. Applegate, Chekitan S. Dev, Gabriele Piccoli, Arnold B. Peinado suggests that, Groupon Experienceflx 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.
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 Groupon Experienceflx supply chain. Even after few cautionary changes mentioned in the HBR case study - Experience! The Finger Lakes: The Groupon Partnership Decision, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Groupon Experienceflx vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Experience! The Finger Lakes: The Groupon Partnership Decision HBR case study mentions - Groupon Experienceflx 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.
Interest costs
– Compare to the competition, Groupon Experienceflx 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.
High cash cycle compare to competitors
Groupon Experienceflx 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.
Opportunities Experience! The Finger Lakes: The Groupon Partnership 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 Experience! The Finger Lakes: The Groupon Partnership Decision are -
Developing new processes and practices
– Groupon Experienceflx 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Groupon Experienceflx can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Experience! The Finger Lakes: The Groupon Partnership Decision, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Groupon Experienceflx 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.
Building a culture of innovation
– managers at Groupon Experienceflx 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.
Manufacturing automation
– Groupon Experienceflx 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.
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. Groupon Experienceflx can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Groupon Experienceflx 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.
Better consumer reach
– The expansion of the 5G network will help Groupon Experienceflx to increase its market reach. Groupon Experienceflx 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Groupon Experienceflx 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 Groupon Experienceflx to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Groupon Experienceflx 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.
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. Groupon Experienceflx can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Groupon Experienceflx in the consumer business. Now Groupon Experienceflx can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Groupon Experienceflx can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Experience! The Finger Lakes: The Groupon Partnership 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.
Threats Experience! The Finger Lakes: The Groupon Partnership Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Experience! The Finger Lakes: The Groupon Partnership Decision are -
Stagnating economy with rate increase
– Groupon Experienceflx 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 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. Groupon Experienceflx needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Regulatory challenges
– Groupon Experienceflx 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 Groupon Experienceflx with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Groupon Experienceflx business can come under increasing regulations regarding data privacy, data security, etc.
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 Groupon Experienceflx.
Consumer confidence and its impact on Groupon Experienceflx 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.
Increasing wage structure of Groupon Experienceflx
– 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 Groupon Experienceflx.
High dependence on third party suppliers
– Groupon Experienceflx 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Groupon Experienceflx 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.
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. Groupon Experienceflx 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.
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 Groupon Experienceflx in the Sales & Marketing sector and impact the bottomline of the organization.
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 Experience! The Finger Lakes: The Groupon Partnership 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 Experience! The Finger Lakes: The Groupon Partnership 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 Experience! The Finger Lakes: The Groupon Partnership 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 Experience! The Finger Lakes: The Groupon Partnership 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 Experience! The Finger Lakes: The Groupon Partnership 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 Groupon Experienceflx needs to make to build a sustainable competitive advantage.