Case Study Description of DreamCycles: Sustaining Growth
DreamCycles is an online retail store specializing in high-end road and mountain bikes. After nearly three years of continually growing sales, however, it was not clear whether this sales growth would be sustainable. The company was founded to address a perceived customization void in the bicycle industry. The online store allowed users to instantly configure bikes online, ensuring complete interoperability of all parts, a cost and selection advantages over competitors. As the first mover into this area, DreamCycles also hoped to create a sustainable position that would allow the company to be a long-term player in the market. Despite the early success of DreamCycles, there were major changes happening in the bicycle retailing industry.
Authors :: Rashi Glazer, Hans Grande, Phil Guindi, Joe Karp
Swot Analysis of "DreamCycles: Sustaining Growth" written by Rashi Glazer, Hans Grande, Phil Guindi, Joe Karp includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dreamcycles Bikes facing as an external strategic factors. Some of the topics covered in DreamCycles: Sustaining Growth case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Internet, Market research and Strategy & Execution.
Some of the macro environment factors that can be used to understand the DreamCycles: Sustaining Growth casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc
Introduction to SWOT Analysis of DreamCycles: Sustaining Growth
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DreamCycles: Sustaining Growth case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dreamcycles Bikes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dreamcycles Bikes 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 DreamCycles: Sustaining Growth can be done for the following purposes –
1. Strategic planning using facts provided in DreamCycles: Sustaining Growth case study
2. Improving business portfolio management of Dreamcycles Bikes
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 Dreamcycles Bikes
Strengths DreamCycles: Sustaining Growth | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dreamcycles Bikes in DreamCycles: Sustaining Growth Harvard Business Review case study are -
Highly skilled collaborators
– Dreamcycles Bikes 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 DreamCycles: Sustaining Growth HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Dreamcycles Bikes has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dreamcycles Bikes to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Dreamcycles Bikes 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 Dreamcycles Bikes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in DreamCycles: Sustaining Growth Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Dreamcycles Bikes 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 Rashi Glazer, Hans Grande, Phil Guindi, Joe Karp 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.
Effective Research and Development (R&D)
– Dreamcycles Bikes 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 DreamCycles: Sustaining Growth - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Dreamcycles Bikes is one of the leading recruiters in the industry. Managers in the DreamCycles: Sustaining Growth are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Dreamcycles Bikes 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 switching costs
– The high switching costs that Dreamcycles Bikes 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.
Innovation driven organization
– Dreamcycles Bikes is one of the most innovative firm in sector. Manager in DreamCycles: Sustaining Growth Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Dreamcycles Bikes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Dreamcycles Bikes is present in almost all the verticals within the industry. This has provided firm in DreamCycles: Sustaining Growth 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.
Organizational Resilience of Dreamcycles Bikes
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dreamcycles Bikes does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses DreamCycles: Sustaining Growth | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DreamCycles: Sustaining Growth are -
Low market penetration in new markets
– Outside its home market of Dreamcycles Bikes, firm in the HBR case study DreamCycles: Sustaining Growth needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Rashi Glazer, Hans Grande, Phil Guindi, Joe Karp suggests that, Dreamcycles Bikes 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.
Skills based hiring
– The stress on hiring functional specialists at Dreamcycles Bikes 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.
Need for greater diversity
– Dreamcycles Bikes 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.
Increasing silos among functional specialists
– The organizational structure of Dreamcycles Bikes is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Dreamcycles Bikes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dreamcycles Bikes to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study DreamCycles: Sustaining Growth 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 DreamCycles: Sustaining Growth can leverage the sales team experience to cultivate customer relationships as Dreamcycles Bikes is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the DreamCycles: Sustaining Growth 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 Dreamcycles Bikes has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Dreamcycles Bikes 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study DreamCycles: Sustaining Growth, it seems that the employees of Dreamcycles Bikes don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Dreamcycles Bikes 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dreamcycles Bikes is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study DreamCycles: Sustaining Growth can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities DreamCycles: Sustaining Growth | 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 DreamCycles: Sustaining Growth are -
Better consumer reach
– The expansion of the 5G network will help Dreamcycles Bikes to increase its market reach. Dreamcycles Bikes 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.
Using analytics as competitive advantage
– Dreamcycles Bikes 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 DreamCycles: Sustaining Growth - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dreamcycles Bikes to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Dreamcycles Bikes 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dreamcycles Bikes 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, Dreamcycles Bikes is facing challenges because of the dominance of functional experts in the organization. DreamCycles: Sustaining Growth 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dreamcycles Bikes in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Buying journey improvements
– Dreamcycles Bikes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DreamCycles: Sustaining Growth 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
– Dreamcycles Bikes 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dreamcycles Bikes 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 Dreamcycles Bikes 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, Dreamcycles Bikes 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, DreamCycles: Sustaining Growth, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Dreamcycles Bikes 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 Strategy & Execution segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dreamcycles Bikes 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.
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 Dreamcycles Bikes in the consumer business. Now Dreamcycles Bikes can target international markets with far fewer capital restrictions requirements than the existing system.
Threats DreamCycles: Sustaining Growth External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DreamCycles: Sustaining Growth are -
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. Dreamcycles Bikes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Dreamcycles Bikes will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Dreamcycles Bikes 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.
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 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. Dreamcycles Bikes needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Dreamcycles Bikes.
Environmental challenges
– Dreamcycles Bikes 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. Dreamcycles Bikes can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dreamcycles Bikes 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study DreamCycles: Sustaining Growth, Dreamcycles Bikes may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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 Dreamcycles Bikes business can come under increasing regulations regarding data privacy, data security, etc.
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 Dreamcycles Bikes in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Dreamcycles Bikes
– 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 Dreamcycles Bikes.
Weighted SWOT Analysis of DreamCycles: Sustaining Growth 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 DreamCycles: Sustaining Growth 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 DreamCycles: Sustaining Growth 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 DreamCycles: Sustaining Growth 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 DreamCycles: Sustaining Growth 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 Dreamcycles Bikes needs to make to build a sustainable competitive advantage.
