Putting the 'Relationship' Back Into CRM SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Putting the 'Relationship' Back Into CRM
Many managers think that the way to capture value through relationship marketing is to focus on the "good" customers and get rid of the "bad"ones. But there is a lot more to best practice relationship management than maximizing revenues on individual customers and minimizing costs to serve. The authors studied people who were in emerging, existing and terminated relationships with companies and identified three important ways in which the current practice of CRM fails. First, companies forget that their relationships are not just with consumers, but with people who live rich and complicated lives. Second, because relationships come in different shapes and sizes, companies need to be cognizant of the requirements of diverse types of relationships beyond the loyalty ideal. Finally, companies don't recognize that relationships are two-sided and that these relationships evolve with each interaction. These three failings, illustrated with examples, led to the identification of three principles: Get to know customers as people; think beyond loyalty; and take responsibility for relationships that are two-way. The authors provide guidelines for companies that want to improve the overall value of their customer relationships. They suggest that companies first catalog and analyze the types of customer relationships they have, then develop a portfolio of relationships, optimizing those they have and identifying which new ones to focus on. Companies then need to determine which metrics to use to track the health and performance of those relationships, adjusting as they go. For most companies, the transition to a relationship-based approach will require a significant shift in mindset and practice. Managers will need to expand the type of data collected by their CRM systems, customize CRM solutions to the specific types of relationships the company is managing and retrain customer-facing employees to be sensitive to the relational clues they receive and send. This is an MIT Sloan Management Review article.
Swot Analysis of "Putting the 'Relationship' Back Into CRM" written by Susan Fournier, Jill Avery includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Relationships Crm facing as an external strategic factors. Some of the topics covered in Putting the 'Relationship' Back Into CRM case study are - Strategic Management Strategies, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Putting the 'Relationship' Back Into CRM casestudy better are - – cloud computing is disrupting traditional business models, increasing commodity prices, talent flight as more people leaving formal jobs, technology disruption, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Putting the 'Relationship' Back Into CRM
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Putting the 'Relationship' Back Into CRM case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Relationships Crm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Relationships Crm 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 Putting the 'Relationship' Back Into CRM can be done for the following purposes –
1. Strategic planning using facts provided in Putting the 'Relationship' Back Into CRM case study
2. Improving business portfolio management of Relationships Crm
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 Relationships Crm
Strengths Putting the 'Relationship' Back Into CRM | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Relationships Crm in Putting the 'Relationship' Back Into CRM Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Relationships Crm 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.
Strong track record of project management
– Relationships Crm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Relationships Crm 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 Relationships Crm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Putting the 'Relationship' Back Into CRM Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Relationships Crm is one of the most innovative firm in sector. Manager in Putting the 'Relationship' Back Into CRM Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Putting the 'Relationship' Back Into CRM 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 Relationships Crm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Relationships Crm 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.
Effective Research and Development (R&D)
– Relationships Crm has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Putting the 'Relationship' Back Into CRM - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Relationships Crm 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 Putting the 'Relationship' Back Into CRM HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Relationships Crm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Putting the 'Relationship' Back Into CRM 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.
Ability to recruit top talent
– Relationships Crm is one of the leading recruiters in the industry. Managers in the Putting the 'Relationship' Back Into CRM are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Sales & Marketing industry
– Putting the 'Relationship' Back Into CRM firm has clearly differentiated products in the market place. This has enabled Relationships Crm to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Relationships Crm to invest into research and development (R&D) and innovation.
Analytics focus
– Relationships Crm 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 Susan Fournier, Jill Avery 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 Putting the 'Relationship' Back Into CRM | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Putting the 'Relationship' Back Into CRM are -
Slow decision making process
– As mentioned earlier in the report, Relationships Crm has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Relationships Crm even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High 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 Relationships Crm supply chain. Even after few cautionary changes mentioned in the HBR case study - Putting the 'Relationship' Back Into CRM, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Relationships Crm vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Relationships Crm 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Putting the 'Relationship' Back Into CRM, is just above the industry average. Relationships Crm 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.
Slow to strategic competitive environment developments
– As Putting the 'Relationship' Back Into CRM HBR case study mentions - Relationships Crm 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.
No frontier risks strategy
– After analyzing the HBR case study Putting the 'Relationship' Back Into CRM, 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.
Low market penetration in new markets
– Outside its home market of Relationships Crm, firm in the HBR case study Putting the 'Relationship' Back Into CRM needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Relationships Crm 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 Relationships Crm 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.
Capital Spending Reduction
– Even during the low interest decade, Relationships Crm 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.
Products dominated business model
– Even though Relationships Crm 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 - Putting the 'Relationship' Back Into CRM should strive to include more intangible value offerings along with its core products and services.
Opportunities Putting the 'Relationship' Back Into CRM | 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 Putting the 'Relationship' Back Into CRM are -
Learning at scale
– Online learning technologies has now opened space for Relationships Crm 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.
Manufacturing automation
– Relationships Crm 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.
Buying journey improvements
– Relationships Crm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Putting the 'Relationship' Back Into CRM 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.
Creating value in data economy
– The success of analytics program of Relationships Crm has opened avenues for new revenue streams for the organization in the industry. This can help Relationships Crm to build a more holistic ecosystem as suggested in the Putting the 'Relationship' Back Into CRM case study. Relationships Crm can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Relationships Crm in the consumer business. Now Relationships Crm can target international markets with far fewer capital restrictions requirements than the existing system.
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 Relationships Crm 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Relationships Crm 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Relationships Crm 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, Putting the 'Relationship' Back Into CRM, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Relationships Crm 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.
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. Relationships Crm 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. Relationships Crm 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.
Better consumer reach
– The expansion of the 5G network will help Relationships Crm to increase its market reach. Relationships Crm 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Relationships Crm can use these opportunities to build new business models that can help the communities that Relationships Crm operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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. Relationships Crm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Putting the 'Relationship' Back Into CRM External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Putting the 'Relationship' Back Into CRM 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.
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.
Stagnating economy with rate increase
– Relationships Crm 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.
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. Relationships Crm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Relationships Crm is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Relationships Crm business can come under increasing regulations regarding data privacy, data security, etc.
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 Relationships Crm in the Sales & Marketing sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Relationships Crm 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.
Regulatory challenges
– Relationships Crm 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.
Increasing wage structure of Relationships Crm
– 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 Relationships Crm.
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 Relationships Crm.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Relationships Crm 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.
Environmental challenges
– Relationships Crm 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. Relationships Crm can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Putting the 'Relationship' Back Into CRM 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 Putting the 'Relationship' Back Into CRM 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 Putting the 'Relationship' Back Into CRM 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 Putting the 'Relationship' Back Into CRM 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 Putting the 'Relationship' Back Into CRM 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 Relationships Crm needs to make to build a sustainable competitive advantage.
