Market Segmentation Strategies and Service Sector Productivity SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Market Segmentation Strategies and Service Sector Productivity
Conventional explanations for lagging U.S. service sector productivity focus on the difficulties of measuring service output, a lack of sufficient competition in service industries, and poor management skills. Drawing on data collected in 95 service establishments in the banking and hotel industries in the United States, United Kingdom, and Germany, this article suggests an alternative explanation. U.S. service companies may effectively be achieving low levels of labor productivity by design. The U.S. service establishments in this study are productivity leaders in low value-added market segments but productivity laggards in higher value-added market segments. They have consciously chosen to adjust the labor intensity of service delivery to the business potential of different customer segments. Varying the design of service processes by customer segment has lowered measured productivity levels but may be supporting higher levels of business performance.
Authors :: Brent Keltner, David Finegold, Geoff Mason, Karin Wagner
Swot Analysis of "Market Segmentation Strategies and Service Sector Productivity" written by Brent Keltner, David Finegold, Geoff Mason, Karin Wagner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Productivity Service facing as an external strategic factors. Some of the topics covered in Market Segmentation Strategies and Service Sector Productivity case study are - Strategic Management Strategies, Productivity, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Market Segmentation Strategies and Service Sector Productivity casestudy better are - – increasing commodity prices, there is backlash against globalization, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, cloud computing is disrupting traditional business models,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Market Segmentation Strategies and Service Sector Productivity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Market Segmentation Strategies and Service Sector Productivity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Productivity Service, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Productivity Service 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 Market Segmentation Strategies and Service Sector Productivity can be done for the following purposes –
1. Strategic planning using facts provided in Market Segmentation Strategies and Service Sector Productivity case study
2. Improving business portfolio management of Productivity Service
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Productivity Service
Strengths Market Segmentation Strategies and Service Sector Productivity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Productivity Service in Market Segmentation Strategies and Service Sector Productivity Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– Market Segmentation Strategies and Service Sector Productivity firm has clearly differentiated products in the market place. This has enabled Productivity Service to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Productivity Service to invest into research and development (R&D) and innovation.
High brand equity
– Productivity Service has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Productivity Service to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Productivity Service 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 Brent Keltner, David Finegold, Geoff Mason, Karin Wagner can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Productivity Service 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 Market Segmentation Strategies and Service Sector Productivity - 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 Productivity Service 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.
Highly skilled collaborators
– Productivity Service 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 Market Segmentation Strategies and Service Sector Productivity HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Market Segmentation Strategies and Service Sector Productivity Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Productivity Service 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 Productivity Service is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Market Segmentation Strategies and Service Sector Productivity Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Productivity Service has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Market Segmentation Strategies and Service Sector Productivity 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.
Diverse revenue streams
– Productivity Service is present in almost all the verticals within the industry. This has provided firm in Market Segmentation Strategies and Service Sector Productivity 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Productivity Service digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Productivity Service 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
– Productivity Service has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Productivity Service 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.
Weaknesses Market Segmentation Strategies and Service Sector Productivity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Market Segmentation Strategies and Service Sector Productivity are -
Interest costs
– Compare to the competition, Productivity Service 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 Market Segmentation Strategies and Service Sector Productivity HBR case study mentions - Productivity Service 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 decision making process
– As mentioned earlier in the report, Productivity Service 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. Productivity Service 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Productivity Service is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Market Segmentation Strategies and Service Sector Productivity can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Productivity Service products
– To increase the profitability and margins on the products, Productivity Service needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Productivity Service is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Productivity Service needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Productivity Service to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Productivity Service 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.
Products dominated business model
– Even though Productivity Service 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 - Market Segmentation Strategies and Service Sector Productivity should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Market Segmentation Strategies and Service Sector Productivity, in the dynamic environment Productivity Service has struggled to respond to the nimble upstart competition. Productivity Service has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Brent Keltner, David Finegold, Geoff Mason, Karin Wagner suggests that, Productivity Service 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Market Segmentation Strategies and Service Sector Productivity 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 Productivity Service 's lucrative customers.
Opportunities Market Segmentation Strategies and Service Sector Productivity | 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 Market Segmentation Strategies and Service Sector Productivity are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Productivity Service can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Productivity Service can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Creating value in data economy
– The success of analytics program of Productivity Service has opened avenues for new revenue streams for the organization in the industry. This can help Productivity Service to build a more holistic ecosystem as suggested in the Market Segmentation Strategies and Service Sector Productivity case study. Productivity Service can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Productivity Service is facing challenges because of the dominance of functional experts in the organization. Market Segmentation Strategies and Service Sector Productivity 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Productivity Service can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Productivity Service can develop new processes and procedures in Technology & Operations 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.
Loyalty marketing
– Productivity Service 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Productivity Service can use these opportunities to build new business models that can help the communities that Productivity Service operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Productivity Service 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 Productivity Service to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Productivity Service can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Productivity Service can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Market Segmentation Strategies and Service Sector Productivity suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Productivity Service 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Productivity Service 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. Productivity Service 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.
Threats Market Segmentation Strategies and Service Sector Productivity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Market Segmentation Strategies and Service Sector Productivity are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Productivity Service 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 Market Segmentation Strategies and Service Sector Productivity .
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Productivity Service can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Productivity Service in the Technology & Operations sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Productivity Service has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Productivity Service needs to keep up with the evolution of technology in the Technology & Operations 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.
Consumer confidence and its impact on Productivity Service 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.
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 Productivity Service.
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. Productivity Service 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.
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.
Increasing wage structure of Productivity Service
– 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 Productivity Service.
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.
Stagnating economy with rate increase
– Productivity Service 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.
Environmental challenges
– Productivity Service 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. Productivity Service can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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. Productivity Service needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Market Segmentation Strategies and Service Sector Productivity 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 Market Segmentation Strategies and Service Sector Productivity 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 Market Segmentation Strategies and Service Sector Productivity 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 Market Segmentation Strategies and Service Sector Productivity 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 Market Segmentation Strategies and Service Sector Productivity 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 Productivity Service needs to make to build a sustainable competitive advantage.