Case Study Description of Chase Sapphire: Creating a Millennial Cult Brand
The launch of the Chase Sapphire Reserve credit card was enthusiastically received by Millennial consumers, a cohort that had previously eluded JPMorgan Chase and its competitors. With the one year anniversary of the launch approaching, managers are focused on retaining customers attracted by a one-time signup bonus of 100,000 reward points and on acquiring new customers now that the bonus had been reduced to 50,000 points. They were also refocusing on the remainder of the Chase Sapphire product porfolio to assess differentiation among the products and to identify white space in the market that could support additional new product launches.
Swot Analysis of "Chase Sapphire: Creating a Millennial Cult Brand" written by Shelle Santana, Jill Avery, Christine Snively includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chase Sapphire facing as an external strategic factors. Some of the topics covered in Chase Sapphire: Creating a Millennial Cult Brand case study are - Strategic Management Strategies, Customers, Generational issues, Product development, Sales, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Chase Sapphire: Creating a Millennial Cult Brand casestudy better are - – geopolitical disruptions, increasing household debt because of falling income levels, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, technology disruption,
increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Chase Sapphire: Creating a Millennial Cult Brand
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chase Sapphire: Creating a Millennial Cult Brand case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chase Sapphire, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chase Sapphire 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 Chase Sapphire: Creating a Millennial Cult Brand can be done for the following purposes –
1. Strategic planning using facts provided in Chase Sapphire: Creating a Millennial Cult Brand case study
2. Improving business portfolio management of Chase Sapphire
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chase Sapphire
Strengths Chase Sapphire: Creating a Millennial Cult Brand | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chase Sapphire in Chase Sapphire: Creating a Millennial Cult Brand Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Chase Sapphire 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.
Low bargaining power of suppliers
– Suppliers of Chase Sapphire in the sector have low bargaining power. Chase Sapphire: Creating a Millennial Cult Brand has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chase Sapphire to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Chase Sapphire 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 Chase Sapphire is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Chase Sapphire: Creating a Millennial Cult Brand Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Chase Sapphire digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chase Sapphire 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.
Innovation driven organization
– Chase Sapphire is one of the most innovative firm in sector. Manager in Chase Sapphire: Creating a Millennial Cult Brand Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Chase Sapphire: Creating a Millennial Cult Brand 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.
Diverse revenue streams
– Chase Sapphire is present in almost all the verticals within the industry. This has provided firm in Chase Sapphire: Creating a Millennial Cult Brand 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.
Analytics focus
– Chase Sapphire 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 Shelle Santana, Jill Avery, Christine Snively 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.
Ability to recruit top talent
– Chase Sapphire is one of the leading recruiters in the industry. Managers in the Chase Sapphire: Creating a Millennial Cult Brand 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)
– Chase Sapphire 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 Chase Sapphire: Creating a Millennial Cult Brand - 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 Chase Sapphire 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.
Superior customer experience
– The customer experience strategy of Chase Sapphire in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Chase Sapphire: Creating a Millennial Cult Brand | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chase Sapphire: Creating a Millennial Cult Brand are -
Interest costs
– Compare to the competition, Chase Sapphire 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.
High cash cycle compare to competitors
Chase Sapphire 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.
Slow decision making process
– As mentioned earlier in the report, Chase Sapphire 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. Chase Sapphire 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Chase Sapphire: Creating a Millennial Cult Brand 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 Chase Sapphire has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Chase Sapphire: Creating a Millennial Cult Brand 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 Chase Sapphire: Creating a Millennial Cult Brand can leverage the sales team experience to cultivate customer relationships as Chase Sapphire is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Chase Sapphire 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Chase Sapphire: Creating a Millennial Cult Brand 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 Chase Sapphire 's lucrative customers.
Slow to strategic competitive environment developments
– As Chase Sapphire: Creating a Millennial Cult Brand HBR case study mentions - Chase Sapphire 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Chase Sapphire: Creating a Millennial Cult Brand, is just above the industry average. Chase Sapphire needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Chase Sapphire is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Chase Sapphire needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chase Sapphire to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Chase Sapphire, firm in the HBR case study Chase Sapphire: Creating a Millennial Cult Brand needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Chase Sapphire: Creating a Millennial Cult Brand | 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 Chase Sapphire: Creating a Millennial Cult Brand are -
Buying journey improvements
– Chase Sapphire can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Chase Sapphire: Creating a Millennial Cult Brand 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.
Learning at scale
– Online learning technologies has now opened space for Chase Sapphire 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chase Sapphire is facing challenges because of the dominance of functional experts in the organization. Chase Sapphire: Creating a Millennial Cult Brand 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chase Sapphire 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, Chase Sapphire: Creating a Millennial Cult Brand, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chase Sapphire can use these opportunities to build new business models that can help the communities that Chase Sapphire operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Chase Sapphire to increase its market reach. Chase Sapphire 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chase Sapphire 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 Chase Sapphire to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chase Sapphire 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.
Using analytics as competitive advantage
– Chase Sapphire 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 Chase Sapphire: Creating a Millennial Cult Brand - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chase Sapphire to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Chase Sapphire can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Chase Sapphire has opened avenues for new revenue streams for the organization in the industry. This can help Chase Sapphire to build a more holistic ecosystem as suggested in the Chase Sapphire: Creating a Millennial Cult Brand case study. Chase Sapphire can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Chase Sapphire 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.
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 Chase Sapphire in the consumer business. Now Chase Sapphire can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Chase Sapphire: Creating a Millennial Cult Brand External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chase Sapphire: Creating a Millennial Cult Brand are -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chase Sapphire can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Chase Sapphire is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Chase Sapphire 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.
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 Chase Sapphire.
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. Chase Sapphire needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Chase Sapphire business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Chase Sapphire has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Chase Sapphire needs to keep up with the evolution of technology in the Sales & Marketing 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
– Chase Sapphire 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. Chase Sapphire can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chase Sapphire in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Chase Sapphire 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Chase Sapphire: Creating a Millennial Cult Brand, Chase Sapphire may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chase Sapphire 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 Chase Sapphire: Creating a Millennial Cult Brand .
Increasing wage structure of Chase Sapphire
– 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 Chase Sapphire.
Weighted SWOT Analysis of Chase Sapphire: Creating a Millennial Cult Brand 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 Chase Sapphire: Creating a Millennial Cult Brand 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 Chase Sapphire: Creating a Millennial Cult Brand 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 Chase Sapphire: Creating a Millennial Cult Brand 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 Chase Sapphire: Creating a Millennial Cult Brand 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 Chase Sapphire needs to make to build a sustainable competitive advantage.
