Customer Acquisition at Castlight Health, Inc. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Customer Acquisition at Castlight Health, Inc.
Anna Amphlett, a financial analyst with Tasmanian LLC, gathered information about Castlight Health, Inc., a company whose shares Tasmanian was considering acquiring for its cloud infrastructure portfolio. Castlight provided a cloud-based health solutions platform to its customers for an upfront subscription fee. Castlight experienced substantial growth in revenues over the last five years, but the company had not yet reported a bottom-line profit since its initial public offering (IPO) in 2014. Castlight Health was one of many companies that provided cloud-based computing services and were often referred to as software-as-a-service (SaaS) companies. Castlight Health sold substantially all of its services through its direct sales organization which paid its sales force commissions for acquiring customer contracts. Tasmanian's portfolio manager had asked Amphlett to scrutinize the company's accounting methods, particularly its revenue and expense recognition methods. Upfront revenue recognition and capitalizing and amortizing some indirect outlays were well-known methods for enhancing a company's bottom line. Castlight Health had become quite wary of companies such as salesforce.com, ADT, and Pre-Paid Legal Services, which experienced significant stock price declines after popular press articles criticized their accounting policies. In some cases, the U.S. Securities & Exchange Commission (SEC) had launched an investigation into a company's accounting practices following the critiques. These critiques invariably questioned management's integrity while an SEC investigation distracted management's time and energy from the running the business.
Swot Analysis of "Customer Acquisition at Castlight Health, Inc." written by Graeme Rankine includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Castlight Tasmanian facing as an external strategic factors. Some of the topics covered in Customer Acquisition at Castlight Health, Inc. case study are - Strategic Management Strategies, Technology and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Customer Acquisition at Castlight Health, Inc. casestudy better are - – increasing energy prices, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, etc
Introduction to SWOT Analysis of Customer Acquisition at Castlight Health, Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Customer Acquisition at Castlight Health, Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Castlight Tasmanian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Castlight Tasmanian 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 Customer Acquisition at Castlight Health, Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Customer Acquisition at Castlight Health, Inc. case study
2. Improving business portfolio management of Castlight Tasmanian
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Castlight Tasmanian
Strengths Customer Acquisition at Castlight Health, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Castlight Tasmanian in Customer Acquisition at Castlight Health, Inc. Harvard Business Review case study are -
Training and development
– Castlight Tasmanian has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Customer Acquisition at Castlight Health, Inc. Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Castlight Tasmanian in the sector have low bargaining power. Customer Acquisition at Castlight Health, Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Castlight Tasmanian to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Castlight Tasmanian 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 Castlight Tasmanian is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Customer Acquisition at Castlight Health, Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Customer Acquisition at Castlight Health, Inc. 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.
Strong track record of project management
– Castlight Tasmanian is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Castlight Tasmanian 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 Customer Acquisition at Castlight Health, Inc. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Castlight Tasmanian digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Castlight Tasmanian 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.
Organizational Resilience of Castlight Tasmanian
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Castlight Tasmanian does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Castlight Tasmanian is present in almost all the verticals within the industry. This has provided firm in Customer Acquisition at Castlight Health, Inc. 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.
High switching costs
– The high switching costs that Castlight Tasmanian 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 Castlight Tasmanian in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Castlight Tasmanian is one of the most innovative firm in sector. Manager in Customer Acquisition at Castlight Health, Inc. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Customer Acquisition at Castlight Health, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Customer Acquisition at Castlight Health, Inc. are -
Aligning sales with marketing
– It come across in the case study Customer Acquisition at Castlight Health, Inc. 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 Customer Acquisition at Castlight Health, Inc. can leverage the sales team experience to cultivate customer relationships as Castlight Tasmanian is planning to shift buying processes online.
Lack of clear differentiation of Castlight Tasmanian products
– To increase the profitability and margins on the products, Castlight Tasmanian needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Castlight Tasmanian 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.
Low market penetration in new markets
– Outside its home market of Castlight Tasmanian, firm in the HBR case study Customer Acquisition at Castlight Health, Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Customer Acquisition at Castlight Health, Inc., it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Products dominated business model
– Even though Castlight Tasmanian 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 - Customer Acquisition at Castlight Health, Inc. should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Castlight Tasmanian has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Castlight Tasmanian 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.
Increasing silos among functional specialists
– The organizational structure of Castlight Tasmanian is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Castlight Tasmanian needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Castlight Tasmanian to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Customer Acquisition at Castlight Health, Inc., it seems that the employees of Castlight Tasmanian 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, Castlight Tasmanian has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Customer Acquisition at Castlight Health, Inc. | 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 Customer Acquisition at Castlight Health, Inc. are -
Learning at scale
– Online learning technologies has now opened space for Castlight Tasmanian to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Castlight Tasmanian has opened avenues for new revenue streams for the organization in the industry. This can help Castlight Tasmanian to build a more holistic ecosystem as suggested in the Customer Acquisition at Castlight Health, Inc. case study. Castlight Tasmanian can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Castlight Tasmanian can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Customer Acquisition at Castlight Health, Inc. 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Castlight Tasmanian 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 Castlight Tasmanian to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Castlight Tasmanian can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Castlight Tasmanian 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, Customer Acquisition at Castlight Health, Inc., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Castlight Tasmanian is facing challenges because of the dominance of functional experts in the organization. Customer Acquisition at Castlight Health, Inc. case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Castlight Tasmanian can use these opportunities to build new business models that can help the communities that Castlight Tasmanian operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Castlight Tasmanian 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.
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 Castlight Tasmanian in the consumer business. Now Castlight Tasmanian can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Castlight Tasmanian 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 Finance & Accounting segment.
Manufacturing automation
– Castlight Tasmanian can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
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. Castlight Tasmanian can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Customer Acquisition at Castlight Health, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Customer Acquisition at Castlight Health, Inc. are -
Increasing wage structure of Castlight Tasmanian
– 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 Castlight Tasmanian.
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. Castlight Tasmanian needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Castlight Tasmanian 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.
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 Castlight Tasmanian business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Castlight Tasmanian in the Finance & Accounting industry. The Finance & Accounting 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.
High dependence on third party suppliers
– Castlight Tasmanian 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.
Technology acceleration in Forth Industrial Revolution
– Castlight Tasmanian has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Castlight Tasmanian needs to keep up with the evolution of technology in the Finance & Accounting 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.
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 Castlight Tasmanian in the Finance & Accounting sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Castlight Tasmanian can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Castlight Tasmanian 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. Castlight Tasmanian can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Castlight Tasmanian 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.
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.
Shortening product life cycle
– it is one of the major threat that Castlight Tasmanian is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Customer Acquisition at Castlight Health, Inc. 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 Customer Acquisition at Castlight Health, Inc. 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 Customer Acquisition at Castlight Health, Inc. 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 Customer Acquisition at Castlight Health, Inc. 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 Customer Acquisition at Castlight Health, Inc. 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 Castlight Tasmanian needs to make to build a sustainable competitive advantage.
