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 - – there is increasing trade war between United States & China, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, technology disruption, increasing household debt because of falling income levels,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
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.
Successful track record of launching new products
– Sg Customers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sg Customers 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.
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.
Strong track record of project management
– Sg Customers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Sg Customers in the sector have low bargaining power. How to Identify the Best Customers for Your Business has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sg Customers to manage not only supply disruptions but also source products at highly competitive prices.
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 switching costs
– The high switching costs that Sg Customers 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
– Sg Customers 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 Frank V. Cespedes, James P. Dougherty, Ben S. Skinner III 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.
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 -
Products dominated business model
– Even though Sg Customers 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 - How to Identify the Best Customers for Your Business should strive to include more intangible value offerings along with its core products and services.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sg Customers is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study How to Identify the Best Customers for Your Business can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Sg Customers 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.
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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study How to Identify the Best Customers for Your Business 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 Sg Customers 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Sg Customers, firm in the HBR case study How to Identify the Best Customers for Your Business needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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 -
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.
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.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Sg Customers has opened avenues for new revenue streams for the organization in the industry. This can help Sg Customers to build a more holistic ecosystem as suggested in the How to Identify the Best Customers for Your Business case study. Sg Customers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Loyalty marketing
– Sg Customers 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.
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.
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.
Leveraging digital technologies
– Sg Customers 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.
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 Sg Customers in the consumer business. Now Sg Customers 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. 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.
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 -
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.
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.
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.
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.
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.
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 Sg Customers.
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.
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 How to Identify the Best Customers for Your Business, Sg Customers 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 .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sg Customers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sg Customers 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sg Customers 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 How to Identify the Best Customers for Your Business .
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.