The Decline of Main Street, the Rise of Multichannel Retail SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Decline of Main Street, the Rise of Multichannel Retail
Six years into the economic crisis, companies have learned that they must go wherever consumers congregate and engage them there: in a flagship store on a prime shopping street; in a pop-up store calculated to surprise passers-by in an unexpected location; on the Internet; on their smartphones; in social media networks; or combining the online experience with a click-and-collect service, where goods purchased online can be picked up from a local collection point. Any channel is good, so long as it allows companies to connect with increasingly elusive consumers. But there are other reasons for the proliferation of retail formats, beyond the economic situation. This article reviews the factors that influence the way we shop today, and how these factors affect retail formats. It also looks at how different formats can be integrated into a multichannel strategy.
Swot Analysis of "The Decline of Main Street, the Rise of Multichannel Retail" written by Jose Luis Nueno Iniesta includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Formats Multichannel facing as an external strategic factors. Some of the topics covered in The Decline of Main Street, the Rise of Multichannel Retail case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the The Decline of Main Street, the Rise of Multichannel Retail casestudy better are - – central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, supply chains are disrupted by pandemic , wage bills are increasing, technology disruption,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of The Decline of Main Street, the Rise of Multichannel Retail
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Decline of Main Street, the Rise of Multichannel Retail case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Formats Multichannel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Formats Multichannel 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 The Decline of Main Street, the Rise of Multichannel Retail can be done for the following purposes –
1. Strategic planning using facts provided in The Decline of Main Street, the Rise of Multichannel Retail case study
2. Improving business portfolio management of Formats Multichannel
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 Formats Multichannel
Strengths The Decline of Main Street, the Rise of Multichannel Retail | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Formats Multichannel in The Decline of Main Street, the Rise of Multichannel Retail Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Formats Multichannel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Formats Multichannel 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 The Decline of Main Street, the Rise of Multichannel Retail - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Formats Multichannel 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 Formats Multichannel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Decline of Main Street, the Rise of Multichannel Retail Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Formats Multichannel 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.
High brand equity
– Formats Multichannel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Formats Multichannel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Formats Multichannel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Formats Multichannel 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.
Ability to lead change in Sales & Marketing field
– Formats Multichannel 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 Formats Multichannel in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Formats Multichannel 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 Jose Luis Nueno Iniesta 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.
Successful track record of launching new products
– Formats Multichannel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Formats Multichannel has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Formats Multichannel 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.
Training and development
– Formats Multichannel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Decline of Main Street, the Rise of Multichannel Retail 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.
Highly skilled collaborators
– Formats Multichannel 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 The Decline of Main Street, the Rise of Multichannel Retail HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses The Decline of Main Street, the Rise of Multichannel Retail | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Decline of Main Street, the Rise of Multichannel Retail are -
High operating costs
– Compare to the competitors, firm in the HBR case study The Decline of Main Street, the Rise of Multichannel Retail 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 Formats Multichannel 's lucrative customers.
Aligning sales with marketing
– It come across in the case study The Decline of Main Street, the Rise of Multichannel Retail 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 The Decline of Main Street, the Rise of Multichannel Retail can leverage the sales team experience to cultivate customer relationships as Formats Multichannel is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Formats Multichannel is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Decline of Main Street, the Rise of Multichannel Retail can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Formats Multichannel 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.
No frontier risks strategy
– After analyzing the HBR case study The Decline of Main Street, the Rise of Multichannel Retail, 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.
Products dominated business model
– Even though Formats Multichannel 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 - The Decline of Main Street, the Rise of Multichannel Retail should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Formats Multichannel products
– To increase the profitability and margins on the products, Formats Multichannel needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As The Decline of Main Street, the Rise of Multichannel Retail HBR case study mentions - Formats Multichannel 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.
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 Formats Multichannel supply chain. Even after few cautionary changes mentioned in the HBR case study - The Decline of Main Street, the Rise of Multichannel Retail, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Formats Multichannel vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Formats Multichannel 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.
Slow decision making process
– As mentioned earlier in the report, Formats Multichannel 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. Formats Multichannel 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.
Opportunities The Decline of Main Street, the Rise of Multichannel Retail | 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 The Decline of Main Street, the Rise of Multichannel Retail are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Formats Multichannel 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Formats Multichannel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Formats Multichannel 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.
Learning at scale
– Online learning technologies has now opened space for Formats Multichannel 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Formats Multichannel can use these opportunities to build new business models that can help the communities that Formats Multichannel operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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. Formats Multichannel 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. Formats Multichannel 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.
Manufacturing automation
– Formats Multichannel 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.
Using analytics as competitive advantage
– Formats Multichannel 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 The Decline of Main Street, the Rise of Multichannel Retail - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Formats Multichannel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Formats Multichannel 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.
Buying journey improvements
– Formats Multichannel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Decline of Main Street, the Rise of Multichannel Retail 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.
Leveraging digital technologies
– Formats Multichannel 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.
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. Formats Multichannel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Formats Multichannel 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.
Threats The Decline of Main Street, the Rise of Multichannel Retail External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Decline of Main Street, the Rise of Multichannel Retail are -
Shortening product life cycle
– it is one of the major threat that Formats Multichannel is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Formats Multichannel.
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. Formats Multichannel 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.
High dependence on third party suppliers
– Formats Multichannel 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.
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 Formats Multichannel 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 Formats Multichannel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Formats Multichannel has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Formats Multichannel 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Formats Multichannel 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.
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 Formats Multichannel in the Sales & Marketing sector and impact the bottomline 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 The Decline of Main Street, the Rise of Multichannel Retail, Formats Multichannel 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 .
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. Formats Multichannel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Formats Multichannel
– 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 Formats Multichannel.
Weighted SWOT Analysis of The Decline of Main Street, the Rise of Multichannel Retail 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 The Decline of Main Street, the Rise of Multichannel Retail 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 The Decline of Main Street, the Rise of Multichannel Retail 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 The Decline of Main Street, the Rise of Multichannel Retail 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 The Decline of Main Street, the Rise of Multichannel Retail 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 Formats Multichannel needs to make to build a sustainable competitive advantage.
