Case Study Description of Pitney Bowes: Employer Health Strategy
Pitney Bowes, a Fortune 500 mail and document management firm, offered its first health plans in the years following World War II. Over the ensuing decades, Pitney Bowes adapted its approach to employee health amid rising health care costs, shifting employer attitudes towards health benefits, and a rapidly changing policy environment. By 2008, the firm was widely regarded as an innovator in employee health, having dedicated substantial time and resources to its health benefits under the leadership of then CEO Michael Critelli and Corporate Medical Director Jack Mahoney. The case provides an overview of the history of employee health benefits in the U.S. and at Pitney Bowes. The range of health plans Pitney Bowes offered to employees in 2008, as well as the firm's contracting policies with commercial insurers and self-insured plan administrators, are examined in detail. Pitney Bowes health and wellness programs are also described, enabling an analysis of the firm's overall employee health strategy in 2008 and a discussion of where Pitney Bowes should focus its attention moving forward.
Swot Analysis of "Pitney Bowes: Employer Health Strategy" written by Michael E. Porter, Jennifer F. Baron includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bowes Pitney facing as an external strategic factors. Some of the topics covered in Pitney Bowes: Employer Health Strategy case study are - Strategic Management Strategies, Competitive strategy, Health, Personnel policies and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Pitney Bowes: Employer Health Strategy casestudy better are - – geopolitical disruptions, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Pitney Bowes: Employer Health Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pitney Bowes: Employer Health Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bowes Pitney, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bowes Pitney 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 Pitney Bowes: Employer Health Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Pitney Bowes: Employer Health Strategy case study
2. Improving business portfolio management of Bowes Pitney
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bowes Pitney
Strengths Pitney Bowes: Employer Health Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bowes Pitney in Pitney Bowes: Employer Health Strategy Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Bowes Pitney 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)
– Bowes Pitney 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 Pitney Bowes: Employer Health Strategy - 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
- Bowes Pitney 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 Bowes Pitney is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pitney Bowes: Employer Health Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Bowes Pitney has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Pitney Bowes: Employer Health Strategy 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
– Bowes Pitney is one of the leading recruiters in the industry. Managers in the Pitney Bowes: Employer Health Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Bowes Pitney 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 Pitney Bowes: Employer Health Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Bowes Pitney has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bowes Pitney to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Bowes Pitney 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 Bowes Pitney in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Bowes Pitney 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.
Low bargaining power of suppliers
– Suppliers of Bowes Pitney in the sector have low bargaining power. Pitney Bowes: Employer Health Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bowes Pitney to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Bowes Pitney has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bowes Pitney 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.
Innovation driven organization
– Bowes Pitney is one of the most innovative firm in sector. Manager in Pitney Bowes: Employer Health Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Pitney Bowes: Employer Health Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pitney Bowes: Employer Health Strategy are -
Slow decision making process
– As mentioned earlier in the report, Bowes Pitney 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. Bowes Pitney 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 cash cycle compare to competitors
Bowes Pitney 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bowes Pitney 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Pitney Bowes: Employer Health Strategy 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 Bowes Pitney 's lucrative customers.
Need for greater diversity
– Bowes Pitney 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.
Slow to strategic competitive environment developments
– As Pitney Bowes: Employer Health Strategy HBR case study mentions - Bowes Pitney 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Pitney Bowes: Employer Health Strategy, in the dynamic environment Bowes Pitney has struggled to respond to the nimble upstart competition. Bowes Pitney has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Pitney Bowes: Employer Health Strategy, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Lack of clear differentiation of Bowes Pitney products
– To increase the profitability and margins on the products, Bowes Pitney needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Bowes Pitney, firm in the HBR case study Pitney Bowes: Employer Health Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Bowes Pitney 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.
Opportunities Pitney Bowes: Employer Health Strategy | 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 Pitney Bowes: Employer Health Strategy are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bowes Pitney 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, Pitney Bowes: Employer Health Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bowes Pitney can use these opportunities to build new business models that can help the communities that Bowes Pitney operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Bowes Pitney 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 Pitney Bowes: Employer Health Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bowes Pitney to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Bowes Pitney in the consumer business. Now Bowes Pitney can target international markets with far fewer capital restrictions requirements than the existing system.
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. Bowes Pitney can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bowes Pitney is facing challenges because of the dominance of functional experts in the organization. Pitney Bowes: Employer Health Strategy 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 Bowes Pitney has opened avenues for new revenue streams for the organization in the industry. This can help Bowes Pitney to build a more holistic ecosystem as suggested in the Pitney Bowes: Employer Health Strategy case study. Bowes Pitney can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Bowes Pitney 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.
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 Bowes Pitney 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.
Manufacturing automation
– Bowes Pitney can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bowes Pitney 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. Bowes Pitney 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bowes Pitney 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 Bowes Pitney to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Bowes Pitney can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Pitney Bowes: Employer Health Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pitney Bowes: Employer Health Strategy 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bowes Pitney with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Bowes Pitney is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Bowes Pitney 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 Strategy & Execution industry regulations.
Increasing wage structure of Bowes Pitney
– 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 Bowes Pitney.
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 Bowes Pitney.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bowes Pitney in the Strategy & Execution industry. The Strategy & Execution 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bowes Pitney 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 Pitney Bowes: Employer Health Strategy .
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.
High dependence on third party suppliers
– Bowes Pitney 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.
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 Bowes Pitney in the Strategy & Execution sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bowes Pitney can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Bowes Pitney 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.
Weighted SWOT Analysis of Pitney Bowes: Employer Health Strategy 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 Pitney Bowes: Employer Health Strategy 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 Pitney Bowes: Employer Health Strategy 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 Pitney Bowes: Employer Health Strategy 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 Pitney Bowes: Employer Health Strategy 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 Bowes Pitney needs to make to build a sustainable competitive advantage.
