HubSpot: Lower Churn though Greater CHI SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of HubSpot: Lower Churn though Greater CHI
HubSpot, a web marketing startup is under pressure from VCs to rapidly acquire new customers and to maintain a low level of customer churn. In the case, students explore the drivers of customer churn and uncover opportunities to increase customer retention across the customer selection, selling, and training processes. Students assess a metric, CHI (Customer Happiness Index) which HubSpot uses to predict which customers will churn, and suggest alternatives to improve the firm's predictions. Students develop programs to reduce churn post-hoc and then reengineer the company's marketing, selling, and customer relationship management processes to manage churn proactively through market segmentation and targeting, product design, and customer interactions.
Authors :: F. Asis Martinez-Jerez, Thomas Steenburgh, Jill Avery, Lisa Brem
Swot Analysis of "HubSpot: Lower Churn though Greater CHI" written by F. Asis Martinez-Jerez, Thomas Steenburgh, Jill Avery, Lisa Brem includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Churn Hubspot facing as an external strategic factors. Some of the topics covered in HubSpot: Lower Churn though Greater CHI case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the HubSpot: Lower Churn though Greater CHI casestudy better are - – geopolitical disruptions, increasing household debt because of falling income levels, wage bills are increasing, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
increasing energy prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of HubSpot: Lower Churn though Greater CHI
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in HubSpot: Lower Churn though Greater CHI case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Churn Hubspot, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Churn Hubspot 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 HubSpot: Lower Churn though Greater CHI can be done for the following purposes –
1. Strategic planning using facts provided in HubSpot: Lower Churn though Greater CHI case study
2. Improving business portfolio management of Churn Hubspot
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Churn Hubspot
Strengths HubSpot: Lower Churn though Greater CHI | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Churn Hubspot in HubSpot: Lower Churn though Greater CHI Harvard Business Review case study are -
High brand equity
– Churn Hubspot has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Churn Hubspot to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Churn Hubspot 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.
Training and development
– Churn Hubspot has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in HubSpot: Lower Churn though Greater CHI 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.
Ability to recruit top talent
– Churn Hubspot is one of the leading recruiters in the industry. Managers in the HubSpot: Lower Churn though Greater CHI are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Churn Hubspot digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Churn Hubspot 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
- Churn Hubspot 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 Churn Hubspot is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in HubSpot: Lower Churn though Greater CHI Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Churn Hubspot 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.
Sustainable margins compare to other players in Finance & Accounting industry
– HubSpot: Lower Churn though Greater CHI firm has clearly differentiated products in the market place. This has enabled Churn Hubspot to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Churn Hubspot to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Churn Hubspot in the sector have low bargaining power. HubSpot: Lower Churn though Greater CHI has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Churn Hubspot to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Churn Hubspot is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Churn Hubspot in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the HubSpot: Lower Churn though Greater CHI 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.
Weaknesses HubSpot: Lower Churn though Greater CHI | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of HubSpot: Lower Churn though Greater CHI are -
High bargaining power of channel partners
– Because of the regulatory requirements, F. Asis Martinez-Jerez, Thomas Steenburgh, Jill Avery, Lisa Brem suggests that, Churn Hubspot 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.
Low market penetration in new markets
– Outside its home market of Churn Hubspot, firm in the HBR case study HubSpot: Lower Churn though Greater CHI needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study HubSpot: Lower Churn though Greater CHI 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 HubSpot: Lower Churn though Greater CHI can leverage the sales team experience to cultivate customer relationships as Churn Hubspot is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Churn Hubspot 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.
Capital Spending Reduction
– Even during the low interest decade, Churn Hubspot 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.
Interest costs
– Compare to the competition, Churn Hubspot 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study HubSpot: Lower Churn though Greater CHI, in the dynamic environment Churn Hubspot has struggled to respond to the nimble upstart competition. Churn Hubspot has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Churn Hubspot 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the HubSpot: Lower Churn though Greater CHI 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 Churn Hubspot has relatively successful track record of launching new products.
Lack of clear differentiation of Churn Hubspot products
– To increase the profitability and margins on the products, Churn Hubspot needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Churn Hubspot 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.
Opportunities HubSpot: Lower Churn though Greater CHI | 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 HubSpot: Lower Churn though Greater CHI are -
Better consumer reach
– The expansion of the 5G network will help Churn Hubspot to increase its market reach. Churn Hubspot 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.
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 Churn Hubspot in the consumer business. Now Churn Hubspot can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Churn Hubspot 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 Churn Hubspot to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Churn Hubspot 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 Churn Hubspot in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Churn Hubspot has opened avenues for new revenue streams for the organization in the industry. This can help Churn Hubspot to build a more holistic ecosystem as suggested in the HubSpot: Lower Churn though Greater CHI case study. Churn Hubspot can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Churn Hubspot 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.
Using analytics as competitive advantage
– Churn Hubspot 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 HubSpot: Lower Churn though Greater CHI - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Churn Hubspot to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Churn Hubspot 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 Finance & Accounting segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Churn Hubspot 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.
Developing new processes and practices
– Churn Hubspot can develop new processes and procedures in Finance & Accounting 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Churn Hubspot can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Churn Hubspot can use these opportunities to build new business models that can help the communities that Churn Hubspot operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Threats HubSpot: Lower Churn though Greater CHI External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study HubSpot: Lower Churn though Greater CHI are -
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 Churn Hubspot business can come under increasing regulations regarding data privacy, data security, etc.
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. Churn Hubspot 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.
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 Churn Hubspot in the Finance & Accounting sector and impact the bottomline of the organization.
Environmental challenges
– Churn Hubspot 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. Churn Hubspot can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Churn Hubspot with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Churn Hubspot 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 HubSpot: Lower Churn though Greater CHI .
Shortening product life cycle
– it is one of the major threat that Churn Hubspot is facing in Finance & Accounting 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.
Stagnating economy with rate increase
– Churn Hubspot 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.
Technology acceleration in Forth Industrial Revolution
– Churn Hubspot has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Churn Hubspot needs to keep up with the evolution of technology in the Finance & Accounting 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.
Regulatory challenges
– Churn Hubspot 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 Finance & Accounting industry regulations.
High dependence on third party suppliers
– Churn Hubspot 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.
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. Churn Hubspot needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of HubSpot: Lower Churn though Greater CHI 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 HubSpot: Lower Churn though Greater CHI 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 HubSpot: Lower Churn though Greater CHI 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 HubSpot: Lower Churn though Greater CHI 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 HubSpot: Lower Churn though Greater CHI 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 Churn Hubspot needs to make to build a sustainable competitive advantage.