Customer Focus at Neiman Marcus: "We Report to the Client" SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study Description of Customer Focus at Neiman Marcus: "We Report to the Client"
Describes the winning formula at Neiman Marcus that has made it the No. 1 luxury retailer in the United States in terms of sales per square foot and profitability. Highlights Neiman Marcus' efforts to define who its customers are and are not and to achieve superior focus on its customers by aligning location, price, service, and merchandise to fulfill these customers' every need. Describes ways in which Neiman Marcus prevents typical silo behavior between merchandising and selling and how it ensures that the right merchandise gets to the right customer, despite the challenge of doing this in 36 micromarkets.
Swot Analysis of "Customer Focus at Neiman Marcus: "We Report to the Client"" written by Robert D. Dewar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Neiman Marcus facing as an external strategic factors. Some of the topics covered in Customer Focus at Neiman Marcus: "We Report to the Client" case study are - Strategic Management Strategies, Competitive strategy, Customer service, Human resource management, Organizational culture, Organizational structure and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Customer Focus at Neiman Marcus: "We Report to the Client" casestudy better are - – geopolitical disruptions, central banks are concerned over increasing inflation, there is backlash against globalization, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing commodity prices,
increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Customer Focus at Neiman Marcus: "We Report to the Client"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Customer Focus at Neiman Marcus: "We Report to the Client" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Neiman Marcus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Neiman Marcus 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 Customer Focus at Neiman Marcus: "We Report to the Client" can be done for the following purposes –
1. Strategic planning using facts provided in Customer Focus at Neiman Marcus: "We Report to the Client" case study
2. Improving business portfolio management of Neiman Marcus
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 Neiman Marcus
Strengths Customer Focus at Neiman Marcus: "We Report to the Client" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Neiman Marcus in Customer Focus at Neiman Marcus: "We Report to the Client" Harvard Business Review case study are -
High brand equity
– Neiman Marcus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Neiman Marcus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Customer Focus at Neiman Marcus: "We Report to the Client" firm has clearly differentiated products in the market place. This has enabled Neiman Marcus to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Neiman Marcus to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Neiman Marcus 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 Customer Focus at Neiman Marcus: "We Report to the Client" HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Neiman Marcus is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Neiman Marcus 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 Robert D. Dewar 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.
Innovation driven organization
– Neiman Marcus is one of the most innovative firm in sector. Manager in Customer Focus at Neiman Marcus: "We Report to the Client" Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Neiman Marcus 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 Customer Focus at Neiman Marcus: "We Report to the Client" - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Neiman Marcus has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Neiman Marcus 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.
Learning organization
- Neiman Marcus 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 Neiman Marcus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Customer Focus at Neiman Marcus: "We Report to the Client" Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Neiman Marcus digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Neiman Marcus 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.
High switching costs
– The high switching costs that Neiman Marcus 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.
Cross disciplinary teams
– Horizontal connected teams at the Neiman Marcus 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.
Weaknesses Customer Focus at Neiman Marcus: "We Report to the Client" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Customer Focus at Neiman Marcus: "We Report to the Client" are -
High bargaining power of channel partners
– Because of the regulatory requirements, Robert D. Dewar suggests that, Neiman Marcus 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.
Need for greater diversity
– Neiman Marcus 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Customer Focus at Neiman Marcus: "We Report to the Client", in the dynamic environment Neiman Marcus has struggled to respond to the nimble upstart competition. Neiman Marcus has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Neiman Marcus has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Customer Focus at Neiman Marcus: "We Report to the Client" should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Neiman Marcus, firm in the HBR case study Customer Focus at Neiman Marcus: "We Report to the Client" needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Neiman Marcus 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. Neiman Marcus 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.
Lack of clear differentiation of Neiman Marcus products
– To increase the profitability and margins on the products, Neiman Marcus needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Neiman Marcus is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Neiman Marcus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Neiman Marcus to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Neiman Marcus 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.
No frontier risks strategy
– After analyzing the HBR case study Customer Focus at Neiman Marcus: "We Report to the Client", 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.
Interest costs
– Compare to the competition, Neiman Marcus 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 Customer Focus at Neiman Marcus: "We Report to the Client" | 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 Customer Focus at Neiman Marcus: "We Report to the Client" are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Neiman Marcus can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Neiman Marcus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Neiman Marcus 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 Neiman Marcus to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Neiman Marcus 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Neiman Marcus is facing challenges because of the dominance of functional experts in the organization. Customer Focus at Neiman Marcus: "We Report to the Client" 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.
Manufacturing automation
– Neiman Marcus 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Neiman Marcus 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, Customer Focus at Neiman Marcus: "We Report to the Client", to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Neiman Marcus 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.
Better consumer reach
– The expansion of the 5G network will help Neiman Marcus to increase its market reach. Neiman Marcus 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.
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. Neiman Marcus 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. Neiman Marcus 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.
Developing new processes and practices
– Neiman Marcus can develop new processes and procedures in Strategy & Execution 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.
Leveraging digital technologies
– Neiman Marcus 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.
Learning at scale
– Online learning technologies has now opened space for Neiman Marcus 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.
Threats Customer Focus at Neiman Marcus: "We Report to the Client" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Customer Focus at Neiman Marcus: "We Report to the Client" 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Neiman Marcus 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.
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.
Stagnating economy with rate increase
– Neiman Marcus 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.
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 Neiman Marcus.
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 Neiman Marcus business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Neiman Marcus 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 Customer Focus at Neiman Marcus: "We Report to the Client" .
High dependence on third party suppliers
– Neiman Marcus 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Customer Focus at Neiman Marcus: "We Report to the Client", Neiman Marcus 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 .
Regulatory challenges
– Neiman Marcus 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.
Technology acceleration in Forth Industrial Revolution
– Neiman Marcus has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Neiman Marcus needs to keep up with the evolution of technology in the Strategy & Execution 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.
Environmental challenges
– Neiman Marcus 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. Neiman Marcus can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Neiman Marcus 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 Customer Focus at Neiman Marcus: "We Report to the Client" 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 Customer Focus at Neiman Marcus: "We Report to the Client" 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 Customer Focus at Neiman Marcus: "We Report to the Client" 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 Customer Focus at Neiman Marcus: "We Report to the Client" 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 Customer Focus at Neiman Marcus: "We Report to the Client" 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 Neiman Marcus needs to make to build a sustainable competitive advantage.