Case Study Description of Maru Batting Center: Customer Lifetime Value
This exercise is one in a series intended to help students learn how to perform financial calculations in marketing contexts. Maru Keitou, a decorated former collegiate softball player with a PhD from Oxford University, ran Maru Batting Center in the Roppongi district of Tokyo's Minato ward. She had a deep knowledge of the game and of her customers, but she lacked a marketing background. She had recently signed up for a hosted customer relationship management service that would allow her to track the cost of acquiring and serving each of her four main customer segments. Using this data, she could determine which segments to target in the upcoming year. The exercise describes the use of calculations of customer acquisition cost, retention rates, and customer lifetime value in picking between market segments and various options for activities to acquire customers.
Swot Analysis of "Maru Batting Center: Customer Lifetime Value" written by Julie Hennessy, Evan Meagher includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Maru Batting facing as an external strategic factors. Some of the topics covered in Maru Batting Center: Customer Lifetime Value case study are - Strategic Management Strategies, Financial analysis, Market research and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Maru Batting Center: Customer Lifetime Value casestudy better are - – there is backlash against globalization, supply chains are disrupted by pandemic , geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing household debt because of falling income levels, central banks are concerned over increasing inflation,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, etc
Introduction to SWOT Analysis of Maru Batting Center: Customer Lifetime Value
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Maru Batting Center: Customer Lifetime Value case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Maru Batting, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Maru Batting 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 Maru Batting Center: Customer Lifetime Value can be done for the following purposes –
1. Strategic planning using facts provided in Maru Batting Center: Customer Lifetime Value case study
2. Improving business portfolio management of Maru Batting
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 Maru Batting
Strengths Maru Batting Center: Customer Lifetime Value | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Maru Batting in Maru Batting Center: Customer Lifetime Value Harvard Business Review case study are -
Organizational Resilience of Maru Batting
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Maru Batting does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Maru Batting 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 Maru Batting is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Maru Batting Center: Customer Lifetime Value Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Maru Batting is one of the leading recruiters in the industry. Managers in the Maru Batting Center: Customer Lifetime Value are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Maru Batting 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
– Maru Batting has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Maru Batting Center: Customer Lifetime Value 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Maru Batting Center: Customer Lifetime Value firm has clearly differentiated products in the market place. This has enabled Maru Batting to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Maru Batting to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Maru Batting 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 Maru Batting Center: Customer Lifetime Value - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Maru Batting 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 Maru Batting Center: Customer Lifetime Value HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Maru Batting is present in almost all the verticals within the industry. This has provided firm in Maru Batting Center: Customer Lifetime Value 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.
Successful track record of launching new products
– Maru Batting has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Maru Batting 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.
Strong track record of project management
– Maru Batting is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Maru Batting has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Maru Batting to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Maru Batting Center: Customer Lifetime Value | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Maru Batting Center: Customer Lifetime Value are -
High bargaining power of channel partners
– Because of the regulatory requirements, Julie Hennessy, Evan Meagher suggests that, Maru Batting 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.
Aligning sales with marketing
– It come across in the case study Maru Batting Center: Customer Lifetime Value 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 Maru Batting Center: Customer Lifetime Value can leverage the sales team experience to cultivate customer relationships as Maru Batting is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Maru Batting Center: Customer Lifetime Value, is just above the industry average. Maru Batting 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.
Interest costs
– Compare to the competition, Maru Batting 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.
Capital Spending Reduction
– Even during the low interest decade, Maru Batting 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.
Slow decision making process
– As mentioned earlier in the report, Maru Batting 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. Maru Batting 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 operating costs
– Compare to the competitors, firm in the HBR case study Maru Batting Center: Customer Lifetime Value 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 Maru Batting 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Maru Batting is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Maru Batting Center: Customer Lifetime Value can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Maru Batting Center: Customer Lifetime Value HBR case study mentions - Maru Batting 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 Maru Batting supply chain. Even after few cautionary changes mentioned in the HBR case study - Maru Batting Center: Customer Lifetime Value, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Maru Batting vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Maru Batting Center: Customer Lifetime Value 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 Maru Batting has relatively successful track record of launching new products.
Opportunities Maru Batting Center: Customer Lifetime Value | 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 Maru Batting Center: Customer Lifetime Value are -
Better consumer reach
– The expansion of the 5G network will help Maru Batting to increase its market reach. Maru Batting 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 Maru Batting 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.
Loyalty marketing
– Maru Batting 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Maru Batting 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 Maru Batting to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Maru Batting 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, Maru Batting Center: Customer Lifetime Value, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Maru Batting can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Maru Batting Center: Customer Lifetime Value 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.
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. Maru Batting can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Maru Batting in the consumer business. Now Maru Batting can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Maru Batting 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Maru Batting can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Maru Batting is facing challenges because of the dominance of functional experts in the organization. Maru Batting Center: Customer Lifetime Value 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.
Creating value in data economy
– The success of analytics program of Maru Batting has opened avenues for new revenue streams for the organization in the industry. This can help Maru Batting to build a more holistic ecosystem as suggested in the Maru Batting Center: Customer Lifetime Value case study. Maru Batting can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Maru Batting 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.
Threats Maru Batting Center: Customer Lifetime Value External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Maru Batting Center: Customer Lifetime Value are -
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 Maru Batting.
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. Maru Batting needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Consumer confidence and its impact on Maru Batting 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.
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 Maru Batting in the Sales & Marketing sector and impact the bottomline 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 Maru Batting 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.
Stagnating economy with rate increase
– Maru Batting 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 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.
Regulatory challenges
– Maru Batting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Maru Batting with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Maru Batting 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Maru Batting 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 Maru Batting Center: Customer Lifetime Value .
Increasing wage structure of Maru Batting
– 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 Maru Batting.
Weighted SWOT Analysis of Maru Batting Center: Customer Lifetime Value 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 Maru Batting Center: Customer Lifetime Value 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 Maru Batting Center: Customer Lifetime Value 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 Maru Batting Center: Customer Lifetime Value 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 Maru Batting Center: Customer Lifetime Value 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 Maru Batting needs to make to build a sustainable competitive advantage.