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 - – talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, there is increasing trade war between United States & China, technology disruption, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, 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 -
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.
Sustainable margins compare to other players in Sales & Marketing industry
– Experience! The Finger Lakes: The Groupon Partnership Decision firm has clearly differentiated products in the market place. This has enabled Groupon Experienceflx to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Groupon Experienceflx to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Groupon Experienceflx is present in almost all the verticals within the industry. This has provided firm in Experience! The Finger Lakes: The Groupon Partnership 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.
Ability to lead change in Sales & Marketing field
– Groupon Experienceflx 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 Groupon Experienceflx in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Groupon Experienceflx 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 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.
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.
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.
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.
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 -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Experience! The Finger Lakes: The Groupon Partnership Decision, is just above the industry average. Groupon Experienceflx needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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 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.
Skills based hiring
– The stress on hiring functional specialists at Groupon Experienceflx 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Experience! The Finger Lakes: The Groupon Partnership Decision, in the dynamic environment Groupon Experienceflx has struggled to respond to the nimble upstart competition. Groupon Experienceflx has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Experience! The Finger Lakes: The Groupon Partnership Decision 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 Experience! The Finger Lakes: The Groupon Partnership Decision can leverage the sales team experience to cultivate customer relationships as Groupon Experienceflx is planning to shift buying processes online.
Products dominated business model
– Even though Groupon Experienceflx 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 - Experience! The Finger Lakes: The Groupon Partnership Decision should strive to include more intangible value offerings along with its core products and services.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Groupon Experienceflx 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.
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.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Groupon Experienceflx can use these opportunities to build new business models that can help the communities that Groupon Experienceflx operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Creating value in data economy
– The success of analytics program of Groupon Experienceflx has opened avenues for new revenue streams for the organization in the industry. This can help Groupon Experienceflx to build a more holistic ecosystem as suggested in the Experience! The Finger Lakes: The Groupon Partnership Decision case study. Groupon Experienceflx can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Groupon Experienceflx 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Groupon Experienceflx is facing challenges because of the dominance of functional experts in the organization. Experience! The Finger Lakes: The Groupon Partnership 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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Groupon Experienceflx can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Groupon Experienceflx can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Groupon Experienceflx can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
Using analytics as competitive advantage
– Groupon Experienceflx 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 Experience! The Finger Lakes: The Groupon Partnership Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Groupon Experienceflx to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Experience! The Finger Lakes: The Groupon Partnership Decision, Groupon Experienceflx 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 .
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.
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.
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.
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. Groupon Experienceflx can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Environmental challenges
– Groupon Experienceflx 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. Groupon Experienceflx can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Groupon Experienceflx 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 Experience! The Finger Lakes: The Groupon Partnership Decision .
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.