AARP and AARP Services, A Multi-Sector Approach to Social Change SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Communication
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of AARP and AARP Services, A Multi-Sector Approach to Social Change
In 2006, AARP was one of the largest, most well known nonprofit organizations in the United States. Its membership base exceeded 38 million individuals, by far the largest nonprofit membership base in the country. In recent years, it had influenced major federal legislation on issues including Medicare, Social Security, and pension reform through a coordinated effort of professional lobbyists and grassroots volunteers numbering close to one million. In addition, AARP Services Inc, the organization's wholly owned, taxable (earned income activities) subsidiary, managed relationships with AARP-endorsed businesses that generated over $500 million in royalties from health insurance, life insurance, mutual funds, and other products--making it one of the largest social enterprises in the country. With activities in the commercial, charitable, and political arenas, AARP had adopted a truly cross-sector approach to achieving its mission to "enhance the quality of life for all as we age." Despite its size, influence, and visibility, AARP felt the public did not fully appreciate or understand the organization. In the face of growing public interest and media fascination with the application of business practices and market principles in the social sector--under the rubric of social entrepreneurship--AARP received relatively little attention from journalists, thought leaders, and academics for its enterprising approach. The organization also faced a public relations challenge over the fundamental principles of its cross-sector model. Left unchecked, AARP knew that such allegations, regardless of their validity, could undermine its ability to achieve its long-term goals. The organization also faced competitive challenges and the problem of increasing internal cooperation and synergy across the entire organization in order to improve its competitiveness and execute its social impact and member value agendas.
Authors :: James Phills, Brian Tayan
Topics :: Communication
Tags :: Public relations, Social enterprise, Strategy execution, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "AARP and AARP Services, A Multi-Sector Approach to Social Change" written by James Phills, Brian Tayan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aarp Social facing as an external strategic factors. Some of the topics covered in AARP and AARP Services, A Multi-Sector Approach to Social Change case study are - Strategic Management Strategies, Public relations, Social enterprise, Strategy execution and Communication.
Some of the macro environment factors that can be used to understand the AARP and AARP Services, A Multi-Sector Approach to Social Change casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of AARP and AARP Services, A Multi-Sector Approach to Social Change
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AARP and AARP Services, A Multi-Sector Approach to Social Change case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aarp Social, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aarp Social 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 AARP and AARP Services, A Multi-Sector Approach to Social Change can be done for the following purposes –
1. Strategic planning using facts provided in AARP and AARP Services, A Multi-Sector Approach to Social Change case study
2. Improving business portfolio management of Aarp Social
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aarp Social
Strengths AARP and AARP Services, A Multi-Sector Approach to Social Change | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aarp Social in AARP and AARP Services, A Multi-Sector Approach to Social Change Harvard Business Review case study are -
Successful track record of launching new products
– Aarp Social has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aarp Social 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.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Aarp Social digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aarp Social has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Aarp Social 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 Phills, Brian Tayan 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.
Strong track record of project management
– Aarp Social is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Aarp Social is one of the most innovative firm in sector. Manager in AARP and AARP Services, A Multi-Sector Approach to Social Change Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Communication field
– Aarp Social is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Aarp Social in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Aarp Social in the sector have low bargaining power. AARP and AARP Services, A Multi-Sector Approach to Social Change has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aarp Social to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Aarp Social 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.
High brand equity
– Aarp Social has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aarp Social to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Aarp Social 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 AARP and AARP Services, A Multi-Sector Approach to Social Change - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Aarp Social is present in almost all the verticals within the industry. This has provided firm in AARP and AARP Services, A Multi-Sector Approach to Social Change 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.
Learning organization
- Aarp Social 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 Aarp Social is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AARP and AARP Services, A Multi-Sector Approach to Social Change Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses AARP and AARP Services, A Multi-Sector Approach to Social Change | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AARP and AARP Services, A Multi-Sector Approach to Social Change are -
Skills based hiring
– The stress on hiring functional specialists at Aarp Social 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.
Interest costs
– Compare to the competition, Aarp Social 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.
Lack of clear differentiation of Aarp Social products
– To increase the profitability and margins on the products, Aarp Social needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AARP and AARP Services, A Multi-Sector Approach to Social Change, in the dynamic environment Aarp Social has struggled to respond to the nimble upstart competition. Aarp Social has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Aarp Social 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.
Products dominated business model
– Even though Aarp Social 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 - AARP and AARP Services, A Multi-Sector Approach to Social Change should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As AARP and AARP Services, A Multi-Sector Approach to Social Change HBR case study mentions - Aarp Social 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.
Increasing silos among functional specialists
– The organizational structure of Aarp Social is dominated by functional specialists. It is not different from other players in the Communication segment. Aarp Social needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aarp Social to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Aarp Social, firm in the HBR case study AARP and AARP Services, A Multi-Sector Approach to Social Change needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study AARP and AARP Services, A Multi-Sector Approach to Social Change 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 AARP and AARP Services, A Multi-Sector Approach to Social Change can leverage the sales team experience to cultivate customer relationships as Aarp Social is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study AARP and AARP Services, A Multi-Sector Approach to Social Change 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 Aarp Social 's lucrative customers.
Opportunities AARP and AARP Services, A Multi-Sector Approach to Social Change | 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 AARP and AARP Services, A Multi-Sector Approach to Social Change are -
Creating value in data economy
– The success of analytics program of Aarp Social has opened avenues for new revenue streams for the organization in the industry. This can help Aarp Social to build a more holistic ecosystem as suggested in the AARP and AARP Services, A Multi-Sector Approach to Social Change case study. Aarp Social can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Aarp Social can use the latest technology developments to improve its manufacturing and designing process in Communication 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, Aarp Social 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aarp Social 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. Aarp Social 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.
Developing new processes and practices
– Aarp Social can develop new processes and procedures in Communication industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Leveraging digital technologies
– Aarp Social 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.
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. Aarp Social can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Aarp Social to increase its market reach. Aarp Social 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aarp Social is facing challenges because of the dominance of functional experts in the organization. AARP and AARP Services, A Multi-Sector Approach to Social Change 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.
Buying journey improvements
– Aarp Social can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AARP and AARP Services, A Multi-Sector Approach to Social Change 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.
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 Aarp Social in the consumer business. Now Aarp Social can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Aarp Social 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.
Building a culture of innovation
– managers at Aarp Social 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 Communication segment.
Threats AARP and AARP Services, A Multi-Sector Approach to Social Change External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AARP and AARP Services, A Multi-Sector Approach to Social Change are -
Stagnating economy with rate increase
– Aarp Social 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Aarp Social business can come under increasing regulations regarding data privacy, data security, 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. Aarp Social 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.
Increasing wage structure of Aarp Social
– 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 Aarp Social.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aarp Social in the Communication industry. The Communication 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.
Regulatory challenges
– Aarp Social 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 Communication industry regulations.
High dependence on third party suppliers
– Aarp Social 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.
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Aarp Social can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Aarp Social needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Consumer confidence and its impact on Aarp Social 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.
Shortening product life cycle
– it is one of the major threat that Aarp Social is facing in Communication sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Aarp Social in the Communication sector and impact the bottomline of the organization.
Weighted SWOT Analysis of AARP and AARP Services, A Multi-Sector Approach to Social Change 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 AARP and AARP Services, A Multi-Sector Approach to Social Change 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 AARP and AARP Services, A Multi-Sector Approach to Social Change 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 AARP and AARP Services, A Multi-Sector Approach to Social Change 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 AARP and AARP Services, A Multi-Sector Approach to Social Change 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 Aarp Social needs to make to build a sustainable competitive advantage.
