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 - – increasing commodity prices, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing energy prices, wage bills are increasing, 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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Proposition's Tool 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.
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.
Organizational Resilience of Proposition's Tool
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Proposition's Tool does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Proposition's Tool in the sector have low bargaining power. Strategic value curve analysis: Diagnosing and improving customer value propositions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Proposition's Tool to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Ability to lead change in Strategy & Execution field
– Proposition's Tool 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 Proposition's Tool in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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 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.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Proposition's Tool 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.
Slow to strategic competitive environment developments
– As Strategic value curve analysis: Diagnosing and improving customer value propositions HBR case study mentions - Proposition's Tool takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Strategic value curve analysis: Diagnosing and improving customer value propositions, in the dynamic environment Proposition's Tool has struggled to respond to the nimble upstart competition. Proposition's Tool 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 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.
Skills based hiring
– The stress on hiring functional specialists at Proposition's Tool 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.
Increasing silos among functional specialists
– The organizational structure of Proposition's Tool is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Proposition's Tool needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Proposition's Tool to focus more on services rather than just following the product oriented approach.
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 -
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 Proposition's Tool in the consumer business. Now Proposition's Tool can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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.
Manufacturing automation
– Proposition's Tool 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.
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.
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. Proposition's Tool can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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 -
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.
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.
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 Proposition's Tool business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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.
Environmental challenges
– Proposition's Tool 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. Proposition's Tool can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
Regulatory challenges
– Proposition's Tool 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.
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.
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.
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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