Audio Advice: From Retail to E-Tail SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Audio Advice: From Retail to E-Tail
Audio Advice was a brick-and-mortar audio specialty retailer with two stores in North Carolina. Traditionally, audiophile components were only sold through specialty stores. However, this practice was shifting, with a growing portion of sales occurring online. Audio Advice wanted to capture a portion of this growing channel, so started online as an Amazon Marketplace seller. Though this channel resulted in quick revenue growth without a great deal of initial investment, it was not suitable long term. Audio Advice's management had a bigger vision. In planning their transition to their own e-commerce site, Audio Advice needed to consider branding: should they extend their existing brand, use a sub-brand, or develop a new one? How would each option affect in-store sales, Audio Advice's reputation, and the willingness of audiophile brands to allow online sales of their products? Michael A. Stanko is affiliated with North Carolina State University.
Swot Analysis of "Audio Advice: From Retail to E-Tail" written by Michael A. Stanko includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Audio Advice facing as an external strategic factors. Some of the topics covered in Audio Advice: From Retail to E-Tail case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Audio Advice: From Retail to E-Tail casestudy better are - – increasing commodity prices, geopolitical disruptions, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing energy prices, wage bills are increasing,
challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Audio Advice: From Retail to E-Tail
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Audio Advice: From Retail to E-Tail case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Audio Advice, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Audio Advice 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 Audio Advice: From Retail to E-Tail can be done for the following purposes –
1. Strategic planning using facts provided in Audio Advice: From Retail to E-Tail case study
2. Improving business portfolio management of Audio Advice
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 Audio Advice
Strengths Audio Advice: From Retail to E-Tail | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Audio Advice in Audio Advice: From Retail to E-Tail Harvard Business Review case study are -
Diverse revenue streams
– Audio Advice is present in almost all the verticals within the industry. This has provided firm in Audio Advice: From Retail to E-Tail 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
– Audio Advice 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 Michael A. Stanko 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Audio Advice digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Audio Advice 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.
Cross disciplinary teams
– Horizontal connected teams at the Audio Advice 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Audio Advice: From Retail to E-Tail firm has clearly differentiated products in the market place. This has enabled Audio Advice to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Audio Advice to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Audio Advice in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Audio Advice is one of the leading recruiters in the industry. Managers in the Audio Advice: From Retail to E-Tail are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Audio Advice has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Audio Advice to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Audio Advice is one of the most innovative firm in sector. Manager in Audio Advice: From Retail to E-Tail Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Audio Advice in the sector have low bargaining power. Audio Advice: From Retail to E-Tail has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Audio Advice to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Audio Advice 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.
Learning organization
- Audio Advice 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 Audio Advice is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Audio Advice: From Retail to E-Tail Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Audio Advice: From Retail to E-Tail | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Audio Advice: From Retail to E-Tail are -
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 Audio Advice supply chain. Even after few cautionary changes mentioned in the HBR case study - Audio Advice: From Retail to E-Tail, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Audio Advice vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Audio Advice: From Retail to E-Tail, in the dynamic environment Audio Advice has struggled to respond to the nimble upstart competition. Audio Advice has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Audio Advice 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 - Audio Advice: From Retail to E-Tail should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Audio Advice products
– To increase the profitability and margins on the products, Audio Advice needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Audio Advice: From Retail to E-Tail, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Aligning sales with marketing
– It come across in the case study Audio Advice: From Retail to E-Tail 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 Audio Advice: From Retail to E-Tail can leverage the sales team experience to cultivate customer relationships as Audio Advice is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Audio Advice: From Retail to E-Tail, it seems that the employees of Audio Advice 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.
Interest costs
– Compare to the competition, Audio Advice 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.
Skills based hiring
– The stress on hiring functional specialists at Audio Advice 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Audio Advice is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Audio Advice: From Retail to E-Tail can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Audio Advice: From Retail to E-Tail HBR case study mentions - Audio Advice 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.
Opportunities Audio Advice: From Retail to E-Tail | 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 Audio Advice: From Retail to E-Tail are -
Leveraging digital technologies
– Audio Advice 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.
Learning at scale
– Online learning technologies has now opened space for Audio Advice 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Audio Advice 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 Audio Advice 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 Sales & Marketing industry, but it has also influenced the consumer preferences. Audio Advice can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Audio Advice 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.
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 Audio Advice in the consumer business. Now Audio Advice can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Audio Advice 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 Sales & Marketing segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Audio Advice 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. Audio Advice 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.
Manufacturing automation
– Audio Advice can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Audio Advice 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.
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. Audio Advice can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Audio Advice 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Audio Advice is facing challenges because of the dominance of functional experts in the organization. Audio Advice: From Retail to E-Tail 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.
Threats Audio Advice: From Retail to E-Tail External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Audio Advice: From Retail to E-Tail are -
Shortening product life cycle
– it is one of the major threat that Audio Advice is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Audio Advice 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Audio Advice 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. Audio Advice 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 Audio Advice business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Audio Advice 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.
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 Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Audio Advice 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 Audio Advice in the Sales & Marketing sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Audio Advice 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.
Consumer confidence and its impact on Audio Advice 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.
High dependence on third party suppliers
– Audio Advice 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
– Audio Advice 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. Audio Advice can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Audio Advice: From Retail to E-Tail 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 Audio Advice: From Retail to E-Tail 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 Audio Advice: From Retail to E-Tail 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 Audio Advice: From Retail to E-Tail 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 Audio Advice: From Retail to E-Tail 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 Audio Advice needs to make to build a sustainable competitive advantage.