Case Study Description of Consumer Behavior Online: A Playbook Emerges
As consumer touchpoints increasingly migrate online, it is important to understand how human nature manifests itself in a digital environment. The authors-including the head of the University of Toronto's Behavioural Economics in Action research institute-describe five behavioural biases brought on by a digital environment and present their research findings on three characteristics of digital behaviour: the 'screen effect'; the choice-engine effect; and the connectivity effect. They make it clear that online decision making is not merely the digitization of decision making in a brick-and-mortar world: It is a playing field with completely different rules.
Swot Analysis of "Consumer Behavior Online: A Playbook Emerges" written by Dilip Soman, Melanie Kim, Jessica An includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Behavioural Effect facing as an external strategic factors. Some of the topics covered in Consumer Behavior Online: A Playbook Emerges case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Consumer Behavior Online: A Playbook Emerges casestudy better are - – increasing energy prices, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, there is backlash against globalization,
central banks are concerned over increasing inflation, wage bills are increasing, etc
Introduction to SWOT Analysis of Consumer Behavior Online: A Playbook Emerges
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Consumer Behavior Online: A Playbook Emerges case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Behavioural Effect, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Behavioural Effect 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 Consumer Behavior Online: A Playbook Emerges can be done for the following purposes –
1. Strategic planning using facts provided in Consumer Behavior Online: A Playbook Emerges case study
2. Improving business portfolio management of Behavioural Effect
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 Behavioural Effect
Strengths Consumer Behavior Online: A Playbook Emerges | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Behavioural Effect in Consumer Behavior Online: A Playbook Emerges Harvard Business Review case study are -
Diverse revenue streams
– Behavioural Effect is present in almost all the verticals within the industry. This has provided firm in Consumer Behavior Online: A Playbook Emerges 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.
Successful track record of launching new products
– Behavioural Effect has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Behavioural Effect 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.
Operational resilience
– The operational resilience strategy in the Consumer Behavior Online: A Playbook Emerges 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.
Cross disciplinary teams
– Horizontal connected teams at the Behavioural Effect 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
– Consumer Behavior Online: A Playbook Emerges firm has clearly differentiated products in the market place. This has enabled Behavioural Effect to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Behavioural Effect to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Behavioural Effect is one of the leading recruiters in the industry. Managers in the Consumer Behavior Online: A Playbook Emerges are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Behavioural Effect 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 Dilip Soman, Melanie Kim, Jessica An 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.
Low bargaining power of suppliers
– Suppliers of Behavioural Effect in the sector have low bargaining power. Consumer Behavior Online: A Playbook Emerges has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Behavioural Effect to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Behavioural Effect 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 Consumer Behavior Online: A Playbook Emerges HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Behavioural Effect is one of the most innovative firm in sector. Manager in Consumer Behavior Online: A Playbook Emerges Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Behavioural Effect 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 Behavioural Effect is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Consumer Behavior Online: A Playbook Emerges Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Behavioural Effect digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Behavioural Effect 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.
Weaknesses Consumer Behavior Online: A Playbook Emerges | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Consumer Behavior Online: A Playbook Emerges are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Consumer Behavior Online: A Playbook Emerges, is just above the industry average. Behavioural Effect 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Consumer Behavior Online: A Playbook Emerges 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 Behavioural Effect has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Dilip Soman, Melanie Kim, Jessica An suggests that, Behavioural Effect is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Behavioural Effect 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 Consumer Behavior Online: A Playbook Emerges, it seems that the employees of Behavioural Effect 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 Behavioural Effect products
– To increase the profitability and margins on the products, Behavioural Effect needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Behavioural Effect 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.
Low market penetration in new markets
– Outside its home market of Behavioural Effect, firm in the HBR case study Consumer Behavior Online: A Playbook Emerges needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Consumer Behavior Online: A Playbook Emerges HBR case study mentions - Behavioural Effect 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.
Products dominated business model
– Even though Behavioural Effect 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 - Consumer Behavior Online: A Playbook Emerges should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Consumer Behavior Online: A Playbook Emerges 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 Consumer Behavior Online: A Playbook Emerges can leverage the sales team experience to cultivate customer relationships as Behavioural Effect is planning to shift buying processes online.
Opportunities Consumer Behavior Online: A Playbook Emerges | 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 Consumer Behavior Online: A Playbook Emerges are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Behavioural Effect in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Behavioural Effect is facing challenges because of the dominance of functional experts in the organization. Consumer Behavior Online: A Playbook Emerges 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.
Manufacturing automation
– Behavioural Effect 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Behavioural Effect 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 Behavioural Effect to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Behavioural Effect has opened avenues for new revenue streams for the organization in the industry. This can help Behavioural Effect to build a more holistic ecosystem as suggested in the Consumer Behavior Online: A Playbook Emerges case study. Behavioural Effect can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Behavioural Effect to increase its market reach. Behavioural Effect 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.
Learning at scale
– Online learning technologies has now opened space for Behavioural Effect 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.
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. Behavioural Effect 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. Behavioural Effect 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Behavioural Effect 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.
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. Behavioural Effect can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Behavioural Effect 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 Consumer Behavior Online: A Playbook Emerges - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Behavioural Effect to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Behavioural Effect in the consumer business. Now Behavioural Effect can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Behavioural Effect can develop new processes and procedures in Sales & Marketing 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.
Threats Consumer Behavior Online: A Playbook Emerges External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Consumer Behavior Online: A Playbook Emerges are -
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 Behavioural Effect business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Behavioural Effect 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 Consumer Behavior Online: A Playbook Emerges .
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. Behavioural Effect 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 Behavioural Effect with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Behavioural Effect 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 Behavioural Effect.
Technology acceleration in Forth Industrial Revolution
– Behavioural Effect has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Behavioural Effect 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.
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. Behavioural Effect can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Behavioural Effect 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 Sales & Marketing industry regulations.
Consumer confidence and its impact on Behavioural Effect 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Behavioural Effect 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
– Behavioural Effect 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.
Weighted SWOT Analysis of Consumer Behavior Online: A Playbook Emerges 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 Consumer Behavior Online: A Playbook Emerges 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 Consumer Behavior Online: A Playbook Emerges 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 Consumer Behavior Online: A Playbook Emerges 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 Consumer Behavior Online: A Playbook Emerges 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 Behavioural Effect needs to make to build a sustainable competitive advantage.
