Case Study Description of Spartan Stores, Inc.: Reengineering for Efficient Consumer Response
Describes an effort to rationalize operations at a leading grocery wholesaler, enabled by information systems. Spartan Stores, Inc., is cooperatively owned by its 238 retailers and, through training, consulting, systems support, and cost of goods efficiencies, strives to keep its retailers competitive with larger stores in their markets. The reengineering project covered all processes in the firm, including administration, finance, purchasing, logistics, information technology, and services.
Swot Analysis of "Spartan Stores, Inc.: Reengineering for Efficient Consumer Response" written by James L. McKenney, William T. Schiano includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Spartan Reengineering facing as an external strategic factors. Some of the topics covered in Spartan Stores, Inc.: Reengineering for Efficient Consumer Response case study are - Strategic Management Strategies, IT and Technology & Operations.
Some of the macro environment factors that can be used to understand the Spartan Stores, Inc.: Reengineering for Efficient Consumer Response casestudy better are - – wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing energy prices, technology disruption, there is backlash against globalization, increasing transportation and logistics costs, geopolitical disruptions,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Spartan Stores, Inc.: Reengineering for Efficient Consumer Response
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Spartan Stores, Inc.: Reengineering for Efficient Consumer Response case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Spartan Reengineering, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Spartan Reengineering 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response can be done for the following purposes –
1. Strategic planning using facts provided in Spartan Stores, Inc.: Reengineering for Efficient Consumer Response case study
2. Improving business portfolio management of Spartan Reengineering
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 Spartan Reengineering
Strengths Spartan Stores, Inc.: Reengineering for Efficient Consumer Response | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Spartan Reengineering in Spartan Stores, Inc.: Reengineering for Efficient Consumer Response Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Spartan Reengineering in the sector have low bargaining power. Spartan Stores, Inc.: Reengineering for Efficient Consumer Response has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Spartan Reengineering to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Spartan Reengineering is present in almost all the verticals within the industry. This has provided firm in Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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.
Organizational Resilience of Spartan Reengineering
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Spartan Reengineering does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Spartan Reengineering is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Spartan Reengineering is one of the leading recruiters in the industry. Managers in the Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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)
– Spartan Reengineering 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Spartan Reengineering digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Spartan Reengineering 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.
Analytics focus
– Spartan Reengineering 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 James L. McKenney, William T. Schiano 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
- Spartan Reengineering 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 Spartan Reengineering is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Spartan Stores, Inc.: Reengineering for Efficient Consumer Response Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Technology & Operations industry
– Spartan Stores, Inc.: Reengineering for Efficient Consumer Response firm has clearly differentiated products in the market place. This has enabled Spartan Reengineering to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Spartan Reengineering to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Spartan Reengineering in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Spartan Reengineering has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Spartan Reengineering 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Spartan Stores, Inc.: Reengineering for Efficient Consumer Response are -
Aligning sales with marketing
– It come across in the case study Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response can leverage the sales team experience to cultivate customer relationships as Spartan Reengineering is planning to shift buying processes online.
Products dominated business model
– Even though Spartan Reengineering 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 - Spartan Stores, Inc.: Reengineering for Efficient Consumer Response should strive to include more intangible value offerings along with its core products and services.
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 Spartan Reengineering supply chain. Even after few cautionary changes mentioned in the HBR case study - Spartan Stores, Inc.: Reengineering for Efficient Consumer Response, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Spartan Reengineering vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Spartan Reengineering has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Spartan Reengineering 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Spartan Stores, Inc.: Reengineering for Efficient Consumer Response, it seems that the employees of Spartan Reengineering 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.
Lack of clear differentiation of Spartan Reengineering products
– To increase the profitability and margins on the products, Spartan Reengineering needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Spartan Reengineering is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Spartan Reengineering needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Spartan Reengineering to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Spartan Reengineering 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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 Spartan Reengineering 's lucrative customers.
Interest costs
– Compare to the competition, Spartan Reengineering has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Spartan Stores, Inc.: Reengineering for Efficient Consumer Response | 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response are -
Developing new processes and practices
– Spartan Reengineering 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.
Leveraging digital technologies
– Spartan Reengineering 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.
Manufacturing automation
– Spartan Reengineering 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.
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 Spartan Reengineering in the consumer business. Now Spartan Reengineering can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Spartan Reengineering can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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.
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 Spartan Reengineering 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.
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. Spartan Reengineering 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. Spartan Reengineering 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Spartan Reengineering in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Spartan Reengineering 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, Spartan Stores, Inc.: Reengineering for Efficient Consumer Response, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Spartan Reengineering 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Spartan Reengineering to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Spartan Reengineering is facing challenges because of the dominance of functional experts in the organization. Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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, Spartan Reengineering 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Spartan Reengineering 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 Spartan Reengineering to hire the very best people irrespective of their geographical location.
Threats Spartan Stores, Inc.: Reengineering for Efficient Consumer Response External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Spartan Stores, Inc.: Reengineering for Efficient Consumer Response are -
Stagnating economy with rate increase
– Spartan Reengineering 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.
Regulatory challenges
– Spartan Reengineering 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 Technology & Operations industry regulations.
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. Spartan Reengineering needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Spartan Reengineering 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.
Environmental challenges
– Spartan Reengineering 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. Spartan Reengineering can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Consumer confidence and its impact on Spartan Reengineering 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.
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 Spartan Reengineering in the Technology & Operations sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Spartan Reengineering 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response .
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.
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. Spartan Reengineering can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Spartan Reengineering with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Spartan Reengineering business can come under increasing regulations regarding data privacy, data security, etc.
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 Spartan Reengineering.
Weighted SWOT Analysis of Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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 Spartan Reengineering needs to make to build a sustainable competitive advantage.