Strategic value curve analysis: Diagnosing and improving customer value propositions SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Strategic value curve analysis: Diagnosing and improving customer value propositions
Managers often struggle to determine why their firm is underperforming relative to its rivals. This article outlines how managers and consultants can use an existing strategy tool, Kim and Mauborgne's strategy canvas, to robustly test whether their firm is underperforming because it is (1) properly executing the wrong value proposition's delivery or (2) failing to properly execute the right customer value proposition's delivery. Once the issues with the firm's value proposition and its delivery activities are correctly diagnosed, the strategic value curve analysis tool assists in developing recommendations to improve the firm's profitability. The article concludes by describing how the authors successfully used the tool to help a consulting client complete a review of its strategy.
Swot Analysis of "Strategic value curve analysis: Diagnosing and improving customer value propositions" written by Norman T. Sheehan, Vince Bruni-Bossio includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Proposition's Tool facing as an external strategic factors. Some of the topics covered in Strategic value curve analysis: Diagnosing and improving customer value propositions case study are - Strategic Management Strategies, Financial management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Strategic value curve analysis: Diagnosing and improving customer value propositions casestudy better are - – central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, there is backlash against globalization, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Strategic value curve analysis: Diagnosing and improving customer value propositions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategic value curve analysis: Diagnosing and improving customer value propositions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Proposition's Tool, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Proposition's Tool 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 Strategic value curve analysis: Diagnosing and improving customer value propositions can be done for the following purposes –
1. Strategic planning using facts provided in Strategic value curve analysis: Diagnosing and improving customer value propositions case study
2. Improving business portfolio management of Proposition's Tool
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 Proposition's Tool
Strengths Strategic value curve analysis: Diagnosing and improving customer value propositions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Proposition's Tool in Strategic value curve analysis: Diagnosing and improving customer value propositions Harvard Business Review case study are -
Ability to recruit top talent
– Proposition's Tool is one of the leading recruiters in the industry. Managers in the Strategic value curve analysis: Diagnosing and improving customer value propositions are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Proposition's Tool 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 Proposition's Tool is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Strategic value curve analysis: Diagnosing and improving customer value propositions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Proposition's Tool 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 Norman T. Sheehan, Vince Bruni-Bossio 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.
High switching costs
– The high switching costs that Proposition's Tool 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.
Diverse revenue streams
– Proposition's Tool is present in almost all the verticals within the industry. This has provided firm in Strategic value curve analysis: Diagnosing and improving customer value propositions 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.
Innovation driven organization
– Proposition's Tool is one of the most innovative firm in sector. Manager in Strategic value curve analysis: Diagnosing and improving customer value propositions Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Proposition's Tool digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Proposition's Tool 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.
Strong track record of project management
– Proposition's Tool is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Proposition's Tool 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 Strategic value curve analysis: Diagnosing and improving customer value propositions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Proposition's Tool 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 Strategic value curve analysis: Diagnosing and improving customer value propositions HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Proposition's Tool in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Proposition's Tool has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Proposition's Tool to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Strategic value curve analysis: Diagnosing and improving customer value propositions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategic value curve analysis: Diagnosing and improving customer value propositions are -
High operating costs
– Compare to the competitors, firm in the HBR case study Strategic value curve analysis: Diagnosing and improving customer value propositions 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 Proposition's Tool 's lucrative customers.
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 Proposition's Tool supply chain. Even after few cautionary changes mentioned in the HBR case study - Strategic value curve analysis: Diagnosing and improving customer value propositions, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Proposition's Tool vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Proposition's Tool 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.
No frontier risks strategy
– After analyzing the HBR case study Strategic value curve analysis: Diagnosing and improving customer value propositions, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Strategic value curve analysis: Diagnosing and improving customer value propositions, it seems that the employees of Proposition's Tool 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, Proposition's Tool 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.
Aligning sales with marketing
– It come across in the case study Strategic value curve analysis: Diagnosing and improving customer value propositions 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 Strategic value curve analysis: Diagnosing and improving customer value propositions can leverage the sales team experience to cultivate customer relationships as Proposition's Tool 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 Strategic value curve analysis: Diagnosing and improving customer value propositions 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 Proposition's Tool has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Proposition's Tool 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.
Lack of clear differentiation of Proposition's Tool products
– To increase the profitability and margins on the products, Proposition's Tool needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Proposition's Tool 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 - Strategic value curve analysis: Diagnosing and improving customer value propositions should strive to include more intangible value offerings along with its core products and services.
Opportunities Strategic value curve analysis: Diagnosing and improving customer value propositions | 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 Strategic value curve analysis: Diagnosing and improving customer value propositions are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Proposition's Tool can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Proposition's Tool 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.
Developing new processes and practices
– Proposition's Tool 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Proposition's Tool can use these opportunities to build new business models that can help the communities that Proposition's Tool operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Proposition's Tool 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.
Using analytics as competitive advantage
– Proposition's Tool 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 Strategic value curve analysis: Diagnosing and improving customer value propositions - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Proposition's Tool to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Proposition's Tool 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 Proposition's Tool 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.
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. Proposition's Tool 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. Proposition's Tool 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 Proposition's Tool 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 Proposition's Tool to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Proposition's Tool 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Proposition's Tool 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.
Better consumer reach
– The expansion of the 5G network will help Proposition's Tool to increase its market reach. Proposition's Tool 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.
Threats Strategic value curve analysis: Diagnosing and improving customer value propositions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategic value curve analysis: Diagnosing and improving customer value propositions are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Proposition's Tool 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 Proposition's Tool 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.
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. Proposition's Tool 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.
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. Proposition's Tool needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Strategic value curve analysis: Diagnosing and improving customer value propositions, Proposition's Tool 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 .
High dependence on third party suppliers
– Proposition's Tool 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.
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. Proposition's Tool can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Proposition's Tool 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.
Stagnating economy with rate increase
– Proposition's Tool can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Proposition's Tool has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Proposition's Tool 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.
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 Proposition's Tool in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Proposition's Tool
– 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 Proposition's Tool.
Shortening product life cycle
– it is one of the major threat that Proposition's Tool is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Strategic value curve analysis: Diagnosing and improving customer value propositions 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 Strategic value curve analysis: Diagnosing and improving customer value propositions 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 Strategic value curve analysis: Diagnosing and improving customer value propositions 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 Strategic value curve analysis: Diagnosing and improving customer value propositions 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 Strategic value curve analysis: Diagnosing and improving customer value propositions 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 Proposition's Tool needs to make to build a sustainable competitive advantage.
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