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 - – talent flight as more people leaving formal jobs, increasing commodity prices, increasing transportation and logistics costs, increasing energy prices, challanges to central banks by blockchain based private currencies, technology disruption, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, 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 -
Ability to recruit top talent
– Shoprunner's Shoprunner is one of the leading recruiters in the industry. Managers in the Reinventing Retail: ShopRunner's Network Bet are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Shoprunner's Shoprunner digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shoprunner's Shoprunner 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.
Diverse revenue streams
– Shoprunner's Shoprunner is present in almost all the verticals within the industry. This has provided firm in Reinventing Retail: ShopRunner's Network Bet 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.
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.
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.
Ability to lead change in Sales & Marketing field
– Shoprunner's Shoprunner 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 Shoprunner's Shoprunner in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Shoprunner's Shoprunner 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 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 -
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.
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 star products
– The top 2 products and services of the firm as mentioned in the Reinventing Retail: ShopRunner's Network Bet 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 Shoprunner's Shoprunner has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Reinventing Retail: ShopRunner's Network Bet, 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.
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.
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.
Lack of clear differentiation of Shoprunner's Shoprunner products
– To increase the profitability and margins on the products, Shoprunner's Shoprunner needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Reinventing Retail: ShopRunner's Network Bet 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 Reinventing Retail: ShopRunner's Network Bet can leverage the sales team experience to cultivate customer relationships as Shoprunner's Shoprunner is planning to shift buying processes online.
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.
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.
High cash cycle compare to competitors
Shoprunner's Shoprunner 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.
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 -
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shoprunner's Shoprunner can use these opportunities to build new business models that can help the communities that Shoprunner's Shoprunner operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shoprunner's Shoprunner 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, Reinventing Retail: ShopRunner's Network Bet, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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. Shoprunner's Shoprunner 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. Shoprunner's Shoprunner 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shoprunner's Shoprunner 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.
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.
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.
Using analytics as competitive advantage
– Shoprunner's Shoprunner 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 Reinventing Retail: ShopRunner's Network Bet - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shoprunner's Shoprunner to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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. Shoprunner's Shoprunner needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 .
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.
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 Shoprunner's Shoprunner.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Reinventing Retail: ShopRunner's Network Bet, Shoprunner's Shoprunner 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 .
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 Shoprunner's Shoprunner in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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.
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.
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.
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.
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.
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.
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.
