Store Choice and Shopping Behavior: How Price Format Works SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Store Choice and Shopping Behavior: How Price Format Works
This article presents a perceived shopping utility framework for analyzing the impact of retail price format on store choice. Retail price format, in turn, determines three key performance metrics: number of shoppers, number of trips, and average spending per trip. When choosing a store, consumers evaluate both the fixed and variable utilities of shopping. The fixed utility does not vary from trip to trip whereas the variable utility depends on the size and composition of the shopping list. Summarizes prior findings on store choice, analyzes how retailers can improve their performance, and interprets the practices of leading retailers. Presents a framework that can accommodate situations where retailers face multiple segments of buyers with different sensitivities to fixed and variable utilities.
Authors :: Christopher S. Tang, David R. Bell, Teck-Hua Ho
Swot Analysis of "Store Choice and Shopping Behavior: How Price Format Works" written by Christopher S. Tang, David R. Bell, Teck-Hua Ho includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shopping Trip facing as an external strategic factors. Some of the topics covered in Store Choice and Shopping Behavior: How Price Format Works case study are - Strategic Management Strategies, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Store Choice and Shopping Behavior: How Price Format Works casestudy better are - – wage bills are increasing, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of Store Choice and Shopping Behavior: How Price Format Works
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Store Choice and Shopping Behavior: How Price Format Works case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shopping Trip, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shopping Trip 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 Store Choice and Shopping Behavior: How Price Format Works can be done for the following purposes –
1. Strategic planning using facts provided in Store Choice and Shopping Behavior: How Price Format Works case study
2. Improving business portfolio management of Shopping Trip
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 Shopping Trip
Strengths Store Choice and Shopping Behavior: How Price Format Works | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shopping Trip in Store Choice and Shopping Behavior: How Price Format Works Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Store Choice and Shopping Behavior: How Price Format Works 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.
Low bargaining power of suppliers
– Suppliers of Shopping Trip in the sector have low bargaining power. Store Choice and Shopping Behavior: How Price Format Works has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shopping Trip to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Shopping Trip
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shopping Trip does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Shopping Trip has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shopping Trip to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Sales & Marketing field
– Shopping Trip 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 Shopping Trip in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Shopping Trip is present in almost all the verticals within the industry. This has provided firm in Store Choice and Shopping Behavior: How Price Format Works 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.
Effective Research and Development (R&D)
– Shopping Trip 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 Store Choice and Shopping Behavior: How Price Format Works - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Shopping Trip digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shopping Trip 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.
Learning organization
- Shopping Trip 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 Shopping Trip is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Store Choice and Shopping Behavior: How Price Format Works Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Shopping Trip 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 Christopher S. Tang, David R. Bell, Teck-Hua Ho 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.
High switching costs
– The high switching costs that Shopping Trip 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.
Strong track record of project management
– Shopping Trip is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Store Choice and Shopping Behavior: How Price Format Works | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Store Choice and Shopping Behavior: How Price Format Works are -
Skills based hiring
– The stress on hiring functional specialists at Shopping Trip 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.
Products dominated business model
– Even though Shopping Trip 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 - Store Choice and Shopping Behavior: How Price Format Works should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Shopping Trip 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.
Aligning sales with marketing
– It come across in the case study Store Choice and Shopping Behavior: How Price Format Works 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 Store Choice and Shopping Behavior: How Price Format Works can leverage the sales team experience to cultivate customer relationships as Shopping Trip is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Shopping Trip, firm in the HBR case study Store Choice and Shopping Behavior: How Price Format Works needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Shopping Trip 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 Store Choice and Shopping Behavior: How Price Format Works, is just above the industry average. Shopping Trip 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Store Choice and Shopping Behavior: How Price Format Works HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Shopping Trip has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Christopher S. Tang, David R. Bell, Teck-Hua Ho suggests that, Shopping Trip 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.
Need for greater diversity
– Shopping Trip 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 strategic competitive environment developments
– As Store Choice and Shopping Behavior: How Price Format Works HBR case study mentions - Shopping Trip 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.
Opportunities Store Choice and Shopping Behavior: How Price Format Works | 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 Store Choice and Shopping Behavior: How Price Format Works are -
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 Shopping Trip in the consumer business. Now Shopping Trip can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Shopping Trip 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.
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 Shopping Trip 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.
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. Shopping Trip can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shopping Trip is facing challenges because of the dominance of functional experts in the organization. Store Choice and Shopping Behavior: How Price Format Works 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.
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. Shopping Trip can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shopping Trip can use these opportunities to build new business models that can help the communities that Shopping Trip operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shopping Trip 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 Shopping Trip to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Shopping Trip 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.
Loyalty marketing
– Shopping Trip 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.
Buying journey improvements
– Shopping Trip can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Store Choice and Shopping Behavior: How Price Format Works 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 Shopping Trip has opened avenues for new revenue streams for the organization in the industry. This can help Shopping Trip to build a more holistic ecosystem as suggested in the Store Choice and Shopping Behavior: How Price Format Works case study. Shopping Trip can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Shopping Trip 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.
Threats Store Choice and Shopping Behavior: How Price Format Works External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Store Choice and Shopping Behavior: How Price Format Works are -
Technology acceleration in Forth Industrial Revolution
– Shopping Trip has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Shopping Trip 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Store Choice and Shopping Behavior: How Price Format Works, Shopping Trip 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 .
Consumer confidence and its impact on Shopping Trip 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.
Stagnating economy with rate increase
– Shopping Trip 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.
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. Shopping Trip 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.
Increasing wage structure of Shopping Trip
– 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 Shopping Trip.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shopping Trip 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 Store Choice and Shopping Behavior: How Price Format Works .
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 Shopping Trip.
Regulatory challenges
– Shopping Trip 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
– Shopping Trip 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shopping Trip 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.
Weighted SWOT Analysis of Store Choice and Shopping Behavior: How Price Format Works 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 Store Choice and Shopping Behavior: How Price Format Works 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 Store Choice and Shopping Behavior: How Price Format Works 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 Store Choice and Shopping Behavior: How Price Format Works 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 Store Choice and Shopping Behavior: How Price Format Works 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 Shopping Trip needs to make to build a sustainable competitive advantage.