Case Study Description of Dollar Thrifty Automotive Group: Online Discounting
Dollar Thrifty Automotive Group (DTAG) is considering offering a price guarantee to entice consumers to use their web site. Students will be introduced to break-even analysis and general spreadsheet modeling. This is an abridged version of Online Low Price Guarantees - Dollar.com, product # 9B04E016.
Swot Analysis of "Dollar Thrifty Automotive Group: Online Discounting" written by Chris K. Anderson, Benjamin Marcus includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Thrifty Automotive facing as an external strategic factors. Some of the topics covered in Dollar Thrifty Automotive Group: Online Discounting case study are - Strategic Management Strategies, Business models, IT, Pricing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Dollar Thrifty Automotive Group: Online Discounting casestudy better are - – increasing commodity prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing energy prices, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Dollar Thrifty Automotive Group: Online Discounting
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dollar Thrifty Automotive Group: Online Discounting case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Thrifty Automotive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Thrifty Automotive 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 Dollar Thrifty Automotive Group: Online Discounting can be done for the following purposes –
1. Strategic planning using facts provided in Dollar Thrifty Automotive Group: Online Discounting case study
2. Improving business portfolio management of Thrifty Automotive
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 Thrifty Automotive
Strengths Dollar Thrifty Automotive Group: Online Discounting | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Thrifty Automotive in Dollar Thrifty Automotive Group: Online Discounting Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Thrifty Automotive 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Thrifty Automotive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Thrifty Automotive 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.
Innovation driven organization
– Thrifty Automotive is one of the most innovative firm in sector. Manager in Dollar Thrifty Automotive Group: Online Discounting 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
– Thrifty Automotive is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Thrifty Automotive 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 Chris K. Anderson, Benjamin Marcus 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.
Superior customer experience
– The customer experience strategy of Thrifty Automotive in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Thrifty Automotive 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 Thrifty Automotive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dollar Thrifty Automotive Group: Online Discounting Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Thrifty Automotive is present in almost all the verticals within the industry. This has provided firm in Dollar Thrifty Automotive Group: Online Discounting 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.
Effective Research and Development (R&D)
– Thrifty Automotive 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 Dollar Thrifty Automotive Group: Online Discounting - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Leadership & Managing People industry
– Dollar Thrifty Automotive Group: Online Discounting firm has clearly differentiated products in the market place. This has enabled Thrifty Automotive to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Thrifty Automotive to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Thrifty Automotive 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 Dollar Thrifty Automotive Group: Online Discounting HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Thrifty Automotive is one of the leading recruiters in the industry. Managers in the Dollar Thrifty Automotive Group: Online Discounting are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Dollar Thrifty Automotive Group: Online Discounting | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dollar Thrifty Automotive Group: Online Discounting are -
Skills based hiring
– The stress on hiring functional specialists at Thrifty Automotive has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Dollar Thrifty Automotive Group: Online Discounting, it seems that the employees of Thrifty Automotive 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.
High cash cycle compare to competitors
Thrifty Automotive 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.
Products dominated business model
– Even though Thrifty Automotive 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 - Dollar Thrifty Automotive Group: Online Discounting should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Thrifty Automotive 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.
Slow decision making process
– As mentioned earlier in the report, Thrifty Automotive has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Thrifty Automotive even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High bargaining power of channel partners
– Because of the regulatory requirements, Chris K. Anderson, Benjamin Marcus suggests that, Thrifty Automotive 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.
Need for greater diversity
– Thrifty Automotive 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.
Lack of clear differentiation of Thrifty Automotive products
– To increase the profitability and margins on the products, Thrifty Automotive needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Dollar Thrifty Automotive Group: Online Discounting 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 Thrifty Automotive 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Dollar Thrifty Automotive Group: Online Discounting, in the dynamic environment Thrifty Automotive has struggled to respond to the nimble upstart competition. Thrifty Automotive has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Dollar Thrifty Automotive Group: Online Discounting | 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 Dollar Thrifty Automotive Group: Online Discounting are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Thrifty Automotive 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, Dollar Thrifty Automotive Group: Online Discounting, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Thrifty Automotive in the consumer business. Now Thrifty Automotive can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Thrifty Automotive is facing challenges because of the dominance of functional experts in the organization. Dollar Thrifty Automotive Group: Online Discounting 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Thrifty Automotive 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.
Better consumer reach
– The expansion of the 5G network will help Thrifty Automotive to increase its market reach. Thrifty Automotive will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Thrifty Automotive 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.
Loyalty marketing
– Thrifty Automotive 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 Thrifty Automotive 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Thrifty Automotive 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 Thrifty Automotive to hire the very best people irrespective of their geographical location.
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. Thrifty Automotive can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Thrifty Automotive 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 Dollar Thrifty Automotive Group: Online Discounting - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Thrifty Automotive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Thrifty Automotive can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dollar Thrifty Automotive Group: Online Discounting 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.
Leveraging digital technologies
– Thrifty Automotive 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.
Threats Dollar Thrifty Automotive Group: Online Discounting External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dollar Thrifty Automotive Group: Online Discounting are -
Regulatory challenges
– Thrifty Automotive 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.
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.
Stagnating economy with rate increase
– Thrifty Automotive 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.
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.
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 Thrifty Automotive in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Thrifty Automotive can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Thrifty Automotive has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Thrifty Automotive 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.
High dependence on third party suppliers
– Thrifty Automotive 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Thrifty Automotive with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Thrifty Automotive.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Thrifty Automotive 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 Dollar Thrifty Automotive Group: Online Discounting .
Shortening product life cycle
– it is one of the major threat that Thrifty Automotive is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Dollar Thrifty Automotive Group: Online Discounting, Thrifty Automotive 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 .
Weighted SWOT Analysis of Dollar Thrifty Automotive Group: Online Discounting 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 Dollar Thrifty Automotive Group: Online Discounting 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 Dollar Thrifty Automotive Group: Online Discounting 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 Dollar Thrifty Automotive Group: Online Discounting 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 Dollar Thrifty Automotive Group: Online Discounting 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 Thrifty Automotive needs to make to build a sustainable competitive advantage.