Case Study Description of Reinventing Retail: ShopRunner's Network Bet
ShopRunner considers adjustments to improve its online shopping service which offers no-charge two-day shipping as well as easy returns and other conveniences. Competitors' diverse pricing models and ancillary benefits raise questions about how to structure and price ShopRunner's offering. Meanwhile, an investment from Alibaba presents new opportunities in China but risks distraction from the core business.
Swot Analysis of "Reinventing Retail: ShopRunner's Network Bet" written by Benjamin Edelman, Karen L. Webster includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shoprunner's Shoprunner facing as an external strategic factors. Some of the topics covered in Reinventing Retail: ShopRunner's Network Bet case study are - Strategic Management Strategies, IT, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Reinventing Retail: ShopRunner's Network Bet casestudy better are - – supply chains are disrupted by pandemic , wage bills are increasing, technology disruption, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs,
challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Reinventing Retail: ShopRunner's Network Bet
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reinventing Retail: ShopRunner's Network Bet case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shoprunner's Shoprunner, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shoprunner's Shoprunner 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 Reinventing Retail: ShopRunner's Network Bet can be done for the following purposes –
1. Strategic planning using facts provided in Reinventing Retail: ShopRunner's Network Bet case study
2. Improving business portfolio management of Shoprunner's Shoprunner
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 Shoprunner's Shoprunner
Strengths Reinventing Retail: ShopRunner's Network Bet | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shoprunner's Shoprunner in Reinventing Retail: ShopRunner's Network Bet Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Shoprunner's Shoprunner 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
– Reinventing Retail: ShopRunner's Network Bet firm has clearly differentiated products in the market place. This has enabled Shoprunner's Shoprunner to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Shoprunner's Shoprunner to invest into research and development (R&D) and innovation.
Analytics focus
– Shoprunner's Shoprunner 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 Benjamin Edelman, Karen L. Webster 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.
Training and development
– Shoprunner's Shoprunner has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reinventing Retail: ShopRunner's Network Bet 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.
Operational resilience
– The operational resilience strategy in the Reinventing Retail: ShopRunner's Network Bet 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.
Superior customer experience
– The customer experience strategy of Shoprunner's Shoprunner in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Shoprunner's Shoprunner
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shoprunner's Shoprunner does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Shoprunner's Shoprunner 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 Reinventing Retail: ShopRunner's Network Bet HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Shoprunner's Shoprunner in the sector have low bargaining power. Reinventing Retail: ShopRunner's Network Bet has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shoprunner's Shoprunner to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Shoprunner's Shoprunner is one of the most innovative firm in sector. Manager in Reinventing Retail: ShopRunner's Network Bet Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Shoprunner's Shoprunner 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 Reinventing Retail: ShopRunner's Network Bet - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Shoprunner's Shoprunner has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shoprunner's Shoprunner to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Reinventing Retail: ShopRunner's Network Bet | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reinventing Retail: ShopRunner's Network Bet are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Reinventing Retail: ShopRunner's Network Bet, is just above the industry average. Shoprunner's Shoprunner 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.
Skills based hiring
– The stress on hiring functional specialists at Shoprunner's Shoprunner 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reinventing Retail: ShopRunner's Network Bet, it seems that the employees of Shoprunner's Shoprunner don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Capital Spending Reduction
– Even during the low interest decade, Shoprunner's Shoprunner 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 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 Shoprunner's Shoprunner supply chain. Even after few cautionary changes mentioned in the HBR case study - Reinventing Retail: ShopRunner's Network Bet, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shoprunner's Shoprunner vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shoprunner's Shoprunner is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reinventing Retail: ShopRunner's Network Bet can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Shoprunner's Shoprunner 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 - Reinventing Retail: ShopRunner's Network Bet should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Reinventing Retail: ShopRunner's Network Bet 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 Shoprunner's Shoprunner 's lucrative customers.
Slow to strategic competitive environment developments
– As Reinventing Retail: ShopRunner's Network Bet HBR case study mentions - Shoprunner's Shoprunner 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.
Slow decision making process
– As mentioned earlier in the report, Shoprunner's Shoprunner 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. Shoprunner's Shoprunner 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 bargaining power of channel partners
– Because of the regulatory requirements, Benjamin Edelman, Karen L. Webster suggests that, Shoprunner's Shoprunner is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Reinventing Retail: ShopRunner's Network Bet | 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 Reinventing Retail: ShopRunner's Network Bet are -
Better consumer reach
– The expansion of the 5G network will help Shoprunner's Shoprunner to increase its market reach. Shoprunner's Shoprunner 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.
Learning at scale
– Online learning technologies has now opened space for Shoprunner's Shoprunner 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.
Building a culture of innovation
– managers at Shoprunner's Shoprunner 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
– Shoprunner's Shoprunner can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reinventing Retail: ShopRunner's Network Bet 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shoprunner's Shoprunner can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Shoprunner's Shoprunner has opened avenues for new revenue streams for the organization in the industry. This can help Shoprunner's Shoprunner to build a more holistic ecosystem as suggested in the Reinventing Retail: ShopRunner's Network Bet case study. Shoprunner's Shoprunner can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Shoprunner's Shoprunner 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shoprunner's Shoprunner is facing challenges because of the dominance of functional experts in the organization. Reinventing Retail: ShopRunner's Network Bet 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.
Developing new processes and practices
– Shoprunner's Shoprunner 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
– Shoprunner's Shoprunner 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shoprunner's Shoprunner 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.
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. Shoprunner's Shoprunner can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Shoprunner's Shoprunner 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.
Threats Reinventing Retail: ShopRunner's Network Bet External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reinventing Retail: ShopRunner's Network Bet are -
Technology acceleration in Forth Industrial Revolution
– Shoprunner's Shoprunner has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Shoprunner's Shoprunner 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.
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 Shoprunner's Shoprunner business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Shoprunner's Shoprunner with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Shoprunner's Shoprunner 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.
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. Shoprunner's Shoprunner can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Shoprunner's Shoprunner 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. Shoprunner's Shoprunner can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shoprunner's Shoprunner 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 Reinventing Retail: ShopRunner's Network Bet .
Consumer confidence and its impact on Shoprunner's Shoprunner demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Shoprunner's Shoprunner is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shoprunner's Shoprunner 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.
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. Shoprunner's Shoprunner 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.
Stagnating economy with rate increase
– Shoprunner's Shoprunner can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Reinventing Retail: ShopRunner's Network Bet 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 Reinventing Retail: ShopRunner's Network Bet 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 Reinventing Retail: ShopRunner's Network Bet 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 Reinventing Retail: ShopRunner's Network Bet 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 Reinventing Retail: ShopRunner's Network Bet 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 Shoprunner's Shoprunner needs to make to build a sustainable competitive advantage.