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 - – digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
technology disruption, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
Operational resilience
– The operational resilience strategy in the Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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.
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.
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.
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.
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.
Training and development
– Spartan Reengineering has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Spartan Stores, Inc.: Reengineering for Efficient Consumer Response 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.
Highly skilled collaborators
– Spartan Reengineering 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 Spartan Stores, Inc.: Reengineering for Efficient Consumer Response HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
High switching costs
– The high switching costs that Spartan Reengineering 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.
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 -
No frontier risks strategy
– After analyzing the HBR case study Spartan Stores, Inc.: Reengineering for Efficient Consumer Response, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Spartan Reengineering 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. Spartan Reengineering 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.
Low market penetration in new markets
– Outside its home market of Spartan Reengineering, firm in the HBR case study Spartan Stores, Inc.: Reengineering for Efficient Consumer Response needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Spartan Stores, Inc.: Reengineering for Efficient Consumer Response, in the dynamic environment Spartan Reengineering has struggled to respond to the nimble upstart competition. Spartan Reengineering has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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.
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.
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.
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 -
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Spartan Reengineering can use these opportunities to build new business models that can help the communities that Spartan Reengineering operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Spartan Reengineering to increase its market reach. Spartan Reengineering 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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Spartan Reengineering 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.
Creating value in data economy
– The success of analytics program of Spartan Reengineering has opened avenues for new revenue streams for the organization in the industry. This can help Spartan Reengineering to build a more holistic ecosystem as suggested in the Spartan Stores, Inc.: Reengineering for Efficient Consumer Response case study. Spartan Reengineering can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Spartan Reengineering can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Spartan Reengineering 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 Technology & Operations segment.
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.
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.
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 -
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. Spartan Reengineering 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.
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.
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 Spartan Reengineering
– 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 Spartan Reengineering.
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.
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Spartan Stores, Inc.: Reengineering for Efficient Consumer Response, Spartan Reengineering may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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.
