Case Study Description of Learning from Extreme Consumers
Traditional market research methods focus on understanding the average experiences of average consumers. This focus leads to gaps in our knowledge of consumer behavior and often fails to uncover insights that can drive revolutionary, rather than evolutionary innovation. This note outlines a process for studying extreme consumers-consumers who fall in both tails of a normal distribution of customers-with needs, behaviors, attitudes, and emotions atypical of the average customer. Different tactics for leveraging the power of the fringe, product category virgins, customers with constraints, and lovers, haters, and opt-outers are presented.
Swot Analysis of "Learning from Extreme Consumers" written by Jill Avery, Michael I. Norton includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Average Consumers facing as an external strategic factors. Some of the topics covered in Learning from Extreme Consumers case study are - Strategic Management Strategies, Design, Market research, Operations management, Product development, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Learning from Extreme Consumers casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , geopolitical disruptions,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Learning from Extreme Consumers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Learning from Extreme Consumers case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Average Consumers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Average Consumers 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 Learning from Extreme Consumers can be done for the following purposes –
1. Strategic planning using facts provided in Learning from Extreme Consumers case study
2. Improving business portfolio management of Average Consumers
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 Average Consumers
Strengths Learning from Extreme Consumers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Average Consumers in Learning from Extreme Consumers Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Average Consumers 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Learning from Extreme Consumers firm has clearly differentiated products in the market place. This has enabled Average Consumers to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Average Consumers to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Average Consumers 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 Learning from Extreme Consumers - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Average Consumers
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Average Consumers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Average Consumers 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 Average Consumers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Learning from Extreme Consumers Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Average Consumers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Average Consumers has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Average Consumers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Sales & Marketing field
– Average Consumers 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 Average Consumers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Average Consumers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Average Consumers is one of the most innovative firm in sector. Manager in Learning from Extreme Consumers Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Average Consumers in the sector have low bargaining power. Learning from Extreme Consumers has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Average Consumers to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Average Consumers 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 Learning from Extreme Consumers HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Learning from Extreme Consumers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Learning from Extreme Consumers are -
Lack of clear differentiation of Average Consumers products
– To increase the profitability and margins on the products, Average Consumers needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Average Consumers 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. Average Consumers 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 operating costs
– Compare to the competitors, firm in the HBR case study Learning from Extreme Consumers 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 Average Consumers 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Average Consumers, firm in the HBR case study Learning from Extreme Consumers needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Learning from Extreme Consumers, 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.
Skills based hiring
– The stress on hiring functional specialists at Average Consumers 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Jill Avery, Michael I. Norton suggests that, Average Consumers 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.
Aligning sales with marketing
– It come across in the case study Learning from Extreme Consumers 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 Learning from Extreme Consumers can leverage the sales team experience to cultivate customer relationships as Average Consumers is planning to shift buying processes online.
High cash cycle compare to competitors
Average Consumers 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.
Interest costs
– Compare to the competition, Average Consumers has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Average Consumers supply chain. Even after few cautionary changes mentioned in the HBR case study - Learning from Extreme Consumers, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Average Consumers vulnerable to further global disruptions in South East Asia.
Opportunities Learning from Extreme Consumers | 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 Learning from Extreme Consumers are -
Using analytics as competitive advantage
– Average Consumers 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 Learning from Extreme Consumers - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Average Consumers to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Average Consumers has opened avenues for new revenue streams for the organization in the industry. This can help Average Consumers to build a more holistic ecosystem as suggested in the Learning from Extreme Consumers case study. Average Consumers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Average Consumers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Average Consumers to increase its market reach. Average Consumers 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.
Building a culture of innovation
– managers at Average Consumers 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Average Consumers is facing challenges because of the dominance of functional experts in the organization. Learning from Extreme Consumers 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Average Consumers 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Average Consumers 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 Average Consumers to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Average Consumers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Learning from Extreme Consumers suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Average Consumers in the consumer business. Now Average Consumers can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Average Consumers 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.
Learning at scale
– Online learning technologies has now opened space for Average Consumers 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Average Consumers 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, Learning from Extreme Consumers, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Learning from Extreme Consumers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Learning from Extreme Consumers are -
High dependence on third party suppliers
– Average Consumers 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.
Technology acceleration in Forth Industrial Revolution
– Average Consumers has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Average Consumers needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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. Average Consumers can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Learning from Extreme Consumers, Average Consumers 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 .
Environmental challenges
– Average Consumers 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. Average Consumers can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Average Consumers.
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 Average Consumers business can come under increasing regulations regarding data privacy, data security, etc.
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. Average Consumers needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Average Consumers in the Sales & Marketing sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Average Consumers is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Average Consumers 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.
Weighted SWOT Analysis of Learning from Extreme Consumers 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 Learning from Extreme Consumers 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 Learning from Extreme Consumers 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 Learning from Extreme Consumers 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 Learning from Extreme Consumers 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 Average Consumers needs to make to build a sustainable competitive advantage.
