Limits to Growing Customer Value: Being Squeezed Between the Past and the Future SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Limits to Growing Customer Value: Being Squeezed Between the Past and the Future
Marketing managers often have to balance between marketing exploitation strategies (reaping value from what already is known) and marketing exploration strategies (reaping value from new sources). However, do marketing strategies once exploited or explored in a certain way or direction leave enough potential for further exploration? Based on the various cases of Apple, Alpro, Intel, Nutella, Patagonia, and Ryanair, this article shows that several risks and limits come into play when trying to answer this question. Companies may get squeezed between the past and the future while facing the pressure of temporal consistency driven by past behavior and experiencing the limits of future growth in the dominant customer value drivers. To counter this problem, companies often start integrating new value drivers in their story, leading to other risks, such as incompatibility with existing drivers. The cases discussed in this article reveal that companies may have to accept more sacrifices in order to increase returns within their growth trajectory. Value engineering will become a crucial discipline for companies to survive in many industries. This article gives a step-by-step approach on how to implement this in an organization.
Swot Analysis of "Limits to Growing Customer Value: Being Squeezed Between the Past and the Future" written by Marc Logman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Reaping Limits facing as an external strategic factors. Some of the topics covered in Limits to Growing Customer Value: Being Squeezed Between the Past and the Future case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Limits to Growing Customer Value: Being Squeezed Between the Past and the Future casestudy better are - – increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Limits to Growing Customer Value: Being Squeezed Between the Past and the Future
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Limits to Growing Customer Value: Being Squeezed Between the Past and the Future case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reaping Limits, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reaping Limits 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future can be done for the following purposes –
1. Strategic planning using facts provided in Limits to Growing Customer Value: Being Squeezed Between the Past and the Future case study
2. Improving business portfolio management of Reaping Limits
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 Reaping Limits
Strengths Limits to Growing Customer Value: Being Squeezed Between the Past and the Future | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reaping Limits in Limits to Growing Customer Value: Being Squeezed Between the Past and the Future Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Limits to Growing Customer Value: Being Squeezed Between the Past and the Future firm has clearly differentiated products in the market place. This has enabled Reaping Limits to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Reaping Limits to invest into research and development (R&D) and innovation.
High brand equity
– Reaping Limits has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Reaping Limits to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Reaping Limits 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.
Innovation driven organization
– Reaping Limits is one of the most innovative firm in sector. Manager in Limits to Growing Customer Value: Being Squeezed Between the Past and the Future Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Reaping Limits in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Reaping Limits is one of the leading recruiters in the industry. Managers in the Limits to Growing Customer Value: Being Squeezed Between the Past and the Future are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Reaping Limits 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Sales & Marketing field
– Reaping Limits 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 Reaping Limits in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Reaping Limits
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Reaping Limits does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Reaping Limits 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 Marc Logman 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.
Operational resilience
– The operational resilience strategy in the Limits to Growing Customer Value: Being Squeezed Between the Past and the Future 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.
Strong track record of project management
– Reaping Limits is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Limits to Growing Customer Value: Being Squeezed Between the Past and the Future | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Limits to Growing Customer Value: Being Squeezed Between the Past and the Future are -
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 Reaping Limits supply chain. Even after few cautionary changes mentioned in the HBR case study - Limits to Growing Customer Value: Being Squeezed Between the Past and the Future, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Reaping Limits vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Reaping Limits 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.
Products dominated business model
– Even though Reaping Limits 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 - Limits to Growing Customer Value: Being Squeezed Between the Past and the Future should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Reaping Limits 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.
Aligning sales with marketing
– It come across in the case study Limits to Growing Customer Value: Being Squeezed Between the Past and the Future 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future can leverage the sales team experience to cultivate customer relationships as Reaping Limits is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Reaping Limits is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Limits to Growing Customer Value: Being Squeezed Between the Past and the Future can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Limits to Growing Customer Value: Being Squeezed Between the Past and the Future HBR case study mentions - Reaping Limits 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 cash cycle compare to competitors
Reaping Limits 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.
Skills based hiring
– The stress on hiring functional specialists at Reaping Limits 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.
Increasing silos among functional specialists
– The organizational structure of Reaping Limits is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Reaping Limits needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Reaping Limits to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Reaping Limits products
– To increase the profitability and margins on the products, Reaping Limits needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Limits to Growing Customer Value: Being Squeezed Between the Past and the Future | 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Reaping Limits 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.
Manufacturing automation
– Reaping Limits 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Reaping Limits 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, Limits to Growing Customer Value: Being Squeezed Between the Past and the Future, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Reaping Limits 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Reaping Limits to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Reaping Limits 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.
Creating value in data economy
– The success of analytics program of Reaping Limits has opened avenues for new revenue streams for the organization in the industry. This can help Reaping Limits to build a more holistic ecosystem as suggested in the Limits to Growing Customer Value: Being Squeezed Between the Past and the Future case study. Reaping Limits can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Reaping Limits can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Reaping Limits is facing challenges because of the dominance of functional experts in the organization. Limits to Growing Customer Value: Being Squeezed Between the Past and the Future 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.
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 Reaping Limits 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Reaping Limits can use these opportunities to build new business models that can help the communities that Reaping Limits 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, Reaping Limits 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.
Better consumer reach
– The expansion of the 5G network will help Reaping Limits to increase its market reach. Reaping Limits 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.
Learning at scale
– Online learning technologies has now opened space for Reaping Limits 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.
Threats Limits to Growing Customer Value: Being Squeezed Between the Past and the Future External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Limits to Growing Customer Value: Being Squeezed Between the Past and the Future are -
Environmental challenges
– Reaping Limits 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. Reaping Limits 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 Reaping Limits 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Reaping Limits with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Limits to Growing Customer Value: Being Squeezed Between the Past and the Future, Reaping Limits 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 .
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. Reaping Limits 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.
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.
Increasing wage structure of Reaping Limits
– 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 Reaping Limits.
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. Reaping Limits 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 Reaping Limits in the Sales & Marketing sector and impact the bottomline of the organization.
Regulatory challenges
– Reaping Limits 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, Reaping Limits 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future .
Stagnating economy with rate increase
– Reaping Limits 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.
Weighted SWOT Analysis of Limits to Growing Customer Value: Being Squeezed Between the Past and the Future 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future 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 Limits to Growing Customer Value: Being Squeezed Between the Past and the Future 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 Reaping Limits needs to make to build a sustainable competitive advantage.
