Case Study Description of ARISE: A Destination-for-a-Day Spa
A new Dallas-based health and beauty spa aims to use a highly distinctive human resource system as the foundation of its competitive strategy. By encouraging employees to act as "personal wellness coaches" (PWCs) with high commitment and broad responsibilities, the leadership intended to provide a level of client service that would justify premium rates. However, the system is not working. Issues include: tips are lower than expected, reducing expected compensation; scheduling issues create bottlenecks; and the level of commitment varies among PWCs. The result is a high employee turnover rate, and departing employees take an average of 35% of their client base with them when they go. Now, with financials for the spa's second year completed, the VP of spa operations, the VP of business operations, and the CEO must evaluate what is and what isn't working.
Swot Analysis of "ARISE: A Destination-for-a-Day Spa" written by Michael Beer, Lynda St. Clair includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Spa Pwcs facing as an external strategic factors. Some of the topics covered in ARISE: A Destination-for-a-Day Spa case study are - Strategic Management Strategies, Design, Executive compensation, Health, IT, Marketing, Motivating people, Organizational culture, Organizational structure, Personnel policies, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the ARISE: A Destination-for-a-Day Spa casestudy better are - – increasing commodity prices, geopolitical disruptions, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, technology disruption,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of ARISE: A Destination-for-a-Day Spa
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ARISE: A Destination-for-a-Day Spa case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Spa Pwcs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Spa Pwcs 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 ARISE: A Destination-for-a-Day Spa can be done for the following purposes –
1. Strategic planning using facts provided in ARISE: A Destination-for-a-Day Spa case study
2. Improving business portfolio management of Spa Pwcs
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 Spa Pwcs
Strengths ARISE: A Destination-for-a-Day Spa | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Spa Pwcs in ARISE: A Destination-for-a-Day Spa Harvard Business Review case study are -
High switching costs
– The high switching costs that Spa Pwcs 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.
Cross disciplinary teams
– Horizontal connected teams at the Spa Pwcs 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 brand equity
– Spa Pwcs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Spa Pwcs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Spa Pwcs 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 ARISE: A Destination-for-a-Day Spa - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Spa Pwcs is one of the most innovative firm in sector. Manager in ARISE: A Destination-for-a-Day Spa Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Spa Pwcs in the sector have low bargaining power. ARISE: A Destination-for-a-Day Spa has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Spa Pwcs to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Spa Pwcs 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 ARISE: A Destination-for-a-Day Spa HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Spa Pwcs
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Spa Pwcs does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Spa Pwcs is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Spa Pwcs has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ARISE: A Destination-for-a-Day Spa 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.
Ability to recruit top talent
– Spa Pwcs is one of the leading recruiters in the industry. Managers in the ARISE: A Destination-for-a-Day Spa are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– ARISE: A Destination-for-a-Day Spa firm has clearly differentiated products in the market place. This has enabled Spa Pwcs to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Spa Pwcs to invest into research and development (R&D) and innovation.
Weaknesses ARISE: A Destination-for-a-Day Spa | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ARISE: A Destination-for-a-Day Spa are -
High cash cycle compare to competitors
Spa Pwcs 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Spa Pwcs 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Spa Pwcs is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ARISE: A Destination-for-a-Day Spa can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study ARISE: A Destination-for-a-Day Spa, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ARISE: A Destination-for-a-Day Spa, is just above the industry average. Spa Pwcs 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 Spa Pwcs 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 - ARISE: A Destination-for-a-Day Spa should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the ARISE: A Destination-for-a-Day Spa 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 Spa Pwcs has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Spa Pwcs is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Spa Pwcs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Spa Pwcs to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As ARISE: A Destination-for-a-Day Spa HBR case study mentions - Spa Pwcs 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.
Skills based hiring
– The stress on hiring functional specialists at Spa Pwcs 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.
Aligning sales with marketing
– It come across in the case study ARISE: A Destination-for-a-Day Spa 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 ARISE: A Destination-for-a-Day Spa can leverage the sales team experience to cultivate customer relationships as Spa Pwcs is planning to shift buying processes online.
Opportunities ARISE: A Destination-for-a-Day Spa | 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 ARISE: A Destination-for-a-Day Spa are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Spa Pwcs can use these opportunities to build new business models that can help the communities that Spa Pwcs operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Building a culture of innovation
– managers at Spa Pwcs 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Spa Pwcs 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.
Manufacturing automation
– Spa Pwcs 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Spa Pwcs in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Spa Pwcs 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Spa Pwcs can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Spa Pwcs can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ARISE: A Destination-for-a-Day Spa 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Spa Pwcs can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Spa Pwcs 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 Spa Pwcs to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Spa Pwcs 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.
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. Spa Pwcs 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 Spa Pwcs to increase its market reach. Spa Pwcs 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.
Threats ARISE: A Destination-for-a-Day Spa External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ARISE: A Destination-for-a-Day Spa are -
Technology acceleration in Forth Industrial Revolution
– Spa Pwcs has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Spa Pwcs needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Increasing wage structure of Spa Pwcs
– 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 Spa Pwcs.
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 Spa Pwcs 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, Spa Pwcs 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 ARISE: A Destination-for-a-Day Spa .
Stagnating economy with rate increase
– Spa Pwcs 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.
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. Spa Pwcs 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.
Shortening product life cycle
– it is one of the major threat that Spa Pwcs is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Spa Pwcs 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 Leadership & Managing People industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ARISE: A Destination-for-a-Day Spa, Spa Pwcs 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 .
Environmental challenges
– Spa Pwcs 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. Spa Pwcs can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Spa Pwcs needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Spa Pwcs 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Spa Pwcs with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of ARISE: A Destination-for-a-Day Spa 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 ARISE: A Destination-for-a-Day Spa 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 ARISE: A Destination-for-a-Day Spa 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 ARISE: A Destination-for-a-Day Spa 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 ARISE: A Destination-for-a-Day Spa 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 Spa Pwcs needs to make to build a sustainable competitive advantage.
