Case Study Description of Connected Consumption : A Sharing Economy Emerges
Widespread critiques of capitalism-as articulated by social movements such as Occupy Wall Street-have been widely legitimated, say the authors, and the resulting ideological shift has propelled migration towards 'connected consumption'. Emphasizing the re-use of goods rather than buying new, these practices facilitate local, face-to-face connections, and they are redesigning models of service delivery. The authors describe four types of connected consumption, then focus on one ('time banks'), explaining the broader context that is propelling this movement's popularity.
Swot Analysis of "Connected Consumption : A Sharing Economy Emerges" written by Emilie Dubois, Juliet Schor, Lindsey Carfagna includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Connected Consumption facing as an external strategic factors. Some of the topics covered in Connected Consumption : A Sharing Economy Emerges case study are - Strategic Management Strategies, Customers, Ethics and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Connected Consumption : A Sharing Economy Emerges casestudy better are - – increasing commodity prices, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs,
competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Connected Consumption : A Sharing Economy Emerges
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Connected Consumption : A Sharing Economy Emerges case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Connected Consumption, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Connected Consumption 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 Connected Consumption : A Sharing Economy Emerges can be done for the following purposes –
1. Strategic planning using facts provided in Connected Consumption : A Sharing Economy Emerges case study
2. Improving business portfolio management of Connected Consumption
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Connected Consumption
Strengths Connected Consumption : A Sharing Economy Emerges | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Connected Consumption in Connected Consumption : A Sharing Economy Emerges Harvard Business Review case study are -
Ability to recruit top talent
– Connected Consumption is one of the leading recruiters in the industry. Managers in the Connected Consumption : A Sharing Economy 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.
High brand equity
– Connected Consumption has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Connected Consumption to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Connected Consumption 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.
High switching costs
– The high switching costs that Connected Consumption 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Connected Consumption : A Sharing Economy Emerges firm has clearly differentiated products in the market place. This has enabled Connected Consumption to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Connected Consumption to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Connected Consumption 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 Connected Consumption : A Sharing Economy Emerges HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Connected Consumption : A Sharing Economy 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Connected Consumption digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Connected Consumption 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 Connected Consumption
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Connected Consumption does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Leadership & Managing People field
– Connected Consumption 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 Connected Consumption in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Connected Consumption is one of the most innovative firm in sector. Manager in Connected Consumption : A Sharing Economy Emerges Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Connected Consumption is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Connected Consumption : A Sharing Economy Emerges | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Connected Consumption : A Sharing Economy Emerges are -
High bargaining power of channel partners
– Because of the regulatory requirements, Emilie Dubois, Juliet Schor, Lindsey Carfagna suggests that, Connected Consumption 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Connected Consumption : A Sharing Economy Emerges, is just above the industry average. Connected Consumption 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.
Products dominated business model
– Even though Connected Consumption 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 - Connected Consumption : A Sharing Economy 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 Connected Consumption : A Sharing Economy 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 Connected Consumption : A Sharing Economy Emerges can leverage the sales team experience to cultivate customer relationships as Connected Consumption is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Connected Consumption 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.
Low market penetration in new markets
– Outside its home market of Connected Consumption, firm in the HBR case study Connected Consumption : A Sharing Economy Emerges needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Connected Consumption : A Sharing Economy Emerges, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Need for greater diversity
– Connected Consumption 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.
Increasing silos among functional specialists
– The organizational structure of Connected Consumption is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Connected Consumption needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Connected Consumption to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Connected Consumption has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High cash cycle compare to competitors
Connected Consumption 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.
Opportunities Connected Consumption : A Sharing Economy 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 Connected Consumption : A Sharing Economy Emerges are -
Buying journey improvements
– Connected Consumption can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Connected Consumption : A Sharing Economy Emerges 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.
Using analytics as competitive advantage
– Connected Consumption 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 Connected Consumption : A Sharing Economy Emerges - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Connected Consumption to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Connected Consumption can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Connected Consumption 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Connected Consumption 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.
Creating value in data economy
– The success of analytics program of Connected Consumption has opened avenues for new revenue streams for the organization in the industry. This can help Connected Consumption to build a more holistic ecosystem as suggested in the Connected Consumption : A Sharing Economy Emerges case study. Connected Consumption can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Connected Consumption 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, Connected Consumption : A Sharing Economy Emerges, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Connected Consumption 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Connected Consumption 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 Connected Consumption to hire the very best people irrespective of their geographical location.
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 Connected Consumption in the consumer business. Now Connected Consumption can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Connected Consumption can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Building a culture of innovation
– managers at Connected Consumption 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 Leadership & Managing People segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Connected Consumption can use these opportunities to build new business models that can help the communities that Connected Consumption operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Connected Consumption : A Sharing Economy Emerges External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Connected Consumption : A Sharing Economy Emerges are -
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 Connected Consumption in the Leadership & Managing People sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Connected Consumption with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Connected Consumption 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.
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 Connected Consumption in the Leadership & Managing People industry. The Leadership & Managing People 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.
Environmental challenges
– Connected Consumption 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. Connected Consumption can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Connected Consumption : A Sharing Economy Emerges, Connected Consumption may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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 Connected Consumption.
High dependence on third party suppliers
– Connected Consumption 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 Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Connected Consumption can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing wage structure of Connected Consumption
– 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 Connected Consumption.
Consumer confidence and its impact on Connected Consumption 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.
Weighted SWOT Analysis of Connected Consumption : A Sharing Economy 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 Connected Consumption : A Sharing Economy 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 Connected Consumption : A Sharing Economy 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 Connected Consumption : A Sharing Economy 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 Connected Consumption : A Sharing Economy 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 Connected Consumption needs to make to build a sustainable competitive advantage.