Castlight Health: Disrupting the Health Care Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Castlight Health: Disrupting the Health Care Industry
This case study focuses on Castlight Health, a company that offered web-based health comparison tools for consumers. The company provided its tool through a business-to-business based subscription model where the employees of Castlight's clients could research health care costs before receiving care. The case study focuses on the company's newest product, a reference-based pricing product and whether this concept was a short-term fad or whether Castlight Health could successfully implement this new product and strategy.
Swot Analysis of "Castlight Health: Disrupting the Health Care Industry" written by Kristiana Raube includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Castlight Health facing as an external strategic factors. Some of the topics covered in Castlight Health: Disrupting the Health Care Industry case study are - Strategic Management Strategies, Customers, Entrepreneurship, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Castlight Health: Disrupting the Health Care Industry casestudy better are - – digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, supply chains are disrupted by pandemic , technology disruption, there is backlash against globalization, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Castlight Health: Disrupting the Health Care Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Castlight Health: Disrupting the Health Care Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Castlight Health, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Castlight Health 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 Castlight Health: Disrupting the Health Care Industry can be done for the following purposes –
1. Strategic planning using facts provided in Castlight Health: Disrupting the Health Care Industry case study
2. Improving business portfolio management of Castlight Health
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 Castlight Health
Strengths Castlight Health: Disrupting the Health Care Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Castlight Health in Castlight Health: Disrupting the Health Care Industry Harvard Business Review case study are -
Diverse revenue streams
– Castlight Health is present in almost all the verticals within the industry. This has provided firm in Castlight Health: Disrupting the Health Care Industry 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.
Superior customer experience
– The customer experience strategy of Castlight Health in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Castlight Health digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Castlight Health 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.
Successful track record of launching new products
– Castlight Health has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Castlight Health 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.
Organizational Resilience of Castlight Health
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Castlight Health does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Castlight Health 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 Castlight Health in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Castlight Health 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 Kristiana Raube 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.
Learning organization
- Castlight Health 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 Castlight Health is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Castlight Health: Disrupting the Health Care Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Castlight Health has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Castlight Health: Disrupting the Health Care Industry 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.
High brand equity
– Castlight Health has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Castlight Health to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Castlight Health is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– Castlight Health: Disrupting the Health Care Industry firm has clearly differentiated products in the market place. This has enabled Castlight Health to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Castlight Health to invest into research and development (R&D) and innovation.
Weaknesses Castlight Health: Disrupting the Health Care Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Castlight Health: Disrupting the Health Care Industry are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Castlight Health: Disrupting the Health Care Industry 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 Castlight Health has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Castlight Health is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Castlight Health needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Castlight Health to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Castlight Health 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 strategic competitive environment developments
– As Castlight Health: Disrupting the Health Care Industry HBR case study mentions - Castlight Health 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Castlight Health is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Castlight Health: Disrupting the Health Care Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Castlight Health: Disrupting the Health Care Industry, 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.
Slow decision making process
– As mentioned earlier in the report, Castlight Health 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. Castlight Health 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Castlight Health: Disrupting the Health Care Industry, it seems that the employees of Castlight Health 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.
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 Castlight Health supply chain. Even after few cautionary changes mentioned in the HBR case study - Castlight Health: Disrupting the Health Care Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Castlight Health vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Castlight Health, firm in the HBR case study Castlight Health: Disrupting the Health Care Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Kristiana Raube suggests that, Castlight Health 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.
Opportunities Castlight Health: Disrupting the Health Care Industry | 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 Castlight Health: Disrupting the Health Care Industry are -
Leveraging digital technologies
– Castlight Health 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Castlight Health 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.
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. Castlight Health can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Castlight Health 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Castlight Health is facing challenges because of the dominance of functional experts in the organization. Castlight Health: Disrupting the Health Care Industry 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Castlight Health can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Castlight Health can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Castlight Health: Disrupting the Health Care Industry 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Castlight Health can use these opportunities to build new business models that can help the communities that Castlight Health operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Castlight Health in the consumer business. Now Castlight Health can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Castlight Health 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 Castlight Health: Disrupting the Health Care Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Castlight Health to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Castlight Health 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, Castlight Health: Disrupting the Health Care Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Castlight Health to increase its market reach. Castlight Health 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.
Developing new processes and practices
– Castlight Health 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.
Threats Castlight Health: Disrupting the Health Care Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Castlight Health: Disrupting the Health Care Industry are -
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.
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 Castlight Health.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Castlight Health: Disrupting the Health Care Industry, Castlight Health 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 .
Stagnating economy with rate increase
– Castlight Health 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.
Increasing wage structure of Castlight Health
– 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 Castlight Health.
Shortening product life cycle
– it is one of the major threat that Castlight Health is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Castlight Health 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.
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. Castlight Health 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.
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. Castlight Health can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Castlight Health needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Castlight Health business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Castlight Health with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Castlight Health 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 Castlight Health: Disrupting the Health Care Industry 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 Castlight Health: Disrupting the Health Care Industry 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 Castlight Health: Disrupting the Health Care Industry 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 Castlight Health: Disrupting the Health Care Industry 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 Castlight Health: Disrupting the Health Care Industry 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 Castlight Health needs to make to build a sustainable competitive advantage.
