How to Identify the Best Customers for Your Business SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of How to Identify the Best Customers for Your Business
This is an MIT Sloan Management Review article. It's difficult to start a venture that gains traction with paying customers, but it's even harder to grow beyond certain levels of sales. Why? The authors point out that, as ventures grow, their complexity increases. Not only are there more "moving parts,"but interdependencies are more difficult to manage. The original business model must deal with new products or markets. Early leadership behaviors that worked in establishing the business are often not adequate to manage and grow it. SG&A (selling, general and administrative) costs often accelerate faster than revenues. The result: Each year thousands of promising ventures are either forced to go out of business or operate in small niches because they are unable to scale their sales activities. The authors illustrate with the example of a real company in the payroll services business. After a period of rapid growth, "BusinessProcessingCo."saw its revenue growth stall and the SG&A burden become untenable. The company had a costly ad hoc process for evaluating opportunities, forecasting and business development initiatives. The leadership team was unable to define its core customers. As the authors explain, different customers come with different transaction costs for the seller. This affects "upstream"capacity utilization in two respects: the product mix of the selling company (what kind of capacity is utilized) and how capacity is utilized (for example, production lines in manufacturing and the types of people and skills in a service business). The selection of customers also affects "downstream"after-sale economics and organizational requirements. The article discusses the importance of customer selection and how intelligent opportunity management can help companies scale their selling initiatives. It concludes with a general framework for helping executives analyze sales productivity and pipeline value.
Authors :: Frank V. Cespedes, James P. Dougherty, Ben S. Skinner III
Swot Analysis of "How to Identify the Best Customers for Your Business" written by Frank V. Cespedes, James P. Dougherty, Ben S. Skinner III includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sg Customers facing as an external strategic factors. Some of the topics covered in How to Identify the Best Customers for Your Business case study are - Strategic Management Strategies, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the How to Identify the Best Customers for Your Business casestudy better are - – talent flight as more people leaving formal jobs, geopolitical disruptions, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of How to Identify the Best Customers for Your Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in How to Identify the Best Customers for Your Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sg Customers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sg Customers 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 How to Identify the Best Customers for Your Business can be done for the following purposes –
1. Strategic planning using facts provided in How to Identify the Best Customers for Your Business case study
2. Improving business portfolio management of Sg Customers
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 Sg Customers
Strengths How to Identify the Best Customers for Your Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sg Customers in How to Identify the Best Customers for Your Business Harvard Business Review case study are -
Diverse revenue streams
– Sg Customers is present in almost all the verticals within the industry. This has provided firm in How to Identify the Best Customers for Your Business 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.
High brand equity
– Sg Customers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sg Customers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Sales & Marketing industry
– How to Identify the Best Customers for Your Business firm has clearly differentiated products in the market place. This has enabled Sg Customers to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Sg Customers to invest into research and development (R&D) and innovation.
Innovation driven organization
– Sg Customers is one of the most innovative firm in sector. Manager in How to Identify the Best Customers for Your Business 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 Sg Customers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the How to Identify the Best Customers for Your Business 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.
Training and development
– Sg Customers has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in How to Identify the Best Customers for Your Business 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Sg Customers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sg Customers 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.
Ability to recruit top talent
– Sg Customers is one of the leading recruiters in the industry. Managers in the How to Identify the Best Customers for Your Business are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Sg Customers 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.
Learning organization
- Sg Customers 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 Sg Customers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in How to Identify the Best Customers for Your Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Sales & Marketing field
– Sg Customers 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 Sg Customers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses How to Identify the Best Customers for Your Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of How to Identify the Best Customers for Your Business are -
Workers concerns about automation
– As automation is fast increasing in the segment, Sg Customers 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.
Lack of clear differentiation of Sg Customers products
– To increase the profitability and margins on the products, Sg Customers needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As How to Identify the Best Customers for Your Business HBR case study mentions - Sg Customers 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.
Capital Spending Reduction
– Even during the low interest decade, Sg Customers 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.
Need for greater diversity
– Sg Customers 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.
High cash cycle compare to competitors
Sg Customers 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.
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 Sg Customers supply chain. Even after few cautionary changes mentioned in the HBR case study - How to Identify the Best Customers for Your Business, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sg Customers vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study How to Identify the Best Customers for Your Business 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 How to Identify the Best Customers for Your Business can leverage the sales team experience to cultivate customer relationships as Sg Customers is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study How to Identify the Best Customers for Your Business, is just above the industry average. Sg Customers 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.
No frontier risks strategy
– After analyzing the HBR case study How to Identify the Best Customers for Your Business, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Frank V. Cespedes, James P. Dougherty, Ben S. Skinner III suggests that, Sg Customers 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 How to Identify the Best Customers for Your Business | 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 How to Identify the Best Customers for Your Business are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sg Customers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Sg Customers 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sg Customers 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, How to Identify the Best Customers for Your Business, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Sg Customers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. How to Identify the Best Customers for Your Business 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.
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. Sg Customers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sg Customers 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.
Building a culture of innovation
– managers at Sg Customers 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 Sg Customers 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.
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. Sg Customers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Sg Customers can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Using analytics as competitive advantage
– Sg Customers 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 How to Identify the Best Customers for Your Business - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sg Customers to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sg Customers 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 Sg Customers to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Sg Customers to increase its market reach. Sg Customers 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.
Threats How to Identify the Best Customers for Your Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study How to Identify the Best Customers for Your Business are -
Environmental challenges
– Sg Customers 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. Sg Customers can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
High dependence on third party suppliers
– Sg Customers 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.
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. Sg Customers 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.
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 Sg Customers business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Sg Customers 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.
Shortening product life cycle
– it is one of the major threat that Sg Customers is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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. Sg Customers needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Sg Customers
– 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 Sg Customers.
Regulatory challenges
– Sg Customers 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.
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 Sg Customers in the Sales & Marketing sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Sg Customers 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 How to Identify the Best Customers for Your Business 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 How to Identify the Best Customers for Your Business 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 How to Identify the Best Customers for Your Business 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 How to Identify the Best Customers for Your Business 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 How to Identify the Best Customers for Your Business 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 Sg Customers needs to make to build a sustainable competitive advantage.