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 - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, technology disruption, supply chains are disrupted by pandemic ,
increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
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.
Organizational Resilience of Thrifty Automotive
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Thrifty Automotive does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Dollar Thrifty Automotive Group: Online Discounting 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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Thrifty Automotive in the sector have low bargaining power. Dollar Thrifty Automotive Group: Online Discounting has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Thrifty Automotive to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
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.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Dollar Thrifty Automotive Group: Online Discounting 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 Thrifty Automotive has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Thrifty Automotive 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Thrifty Automotive is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Dollar Thrifty Automotive Group: Online Discounting can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Dollar Thrifty Automotive Group: Online Discounting, is just above the industry average. Thrifty Automotive 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 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.
Aligning sales with marketing
– It come across in the case study Dollar Thrifty Automotive Group: Online Discounting 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 Dollar Thrifty Automotive Group: Online Discounting can leverage the sales team experience to cultivate customer relationships as Thrifty Automotive is planning to shift buying processes online.
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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Dollar Thrifty Automotive Group: Online Discounting, 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Thrifty Automotive supply chain. Even after few cautionary changes mentioned in the HBR case study - Dollar Thrifty Automotive Group: Online Discounting, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Thrifty Automotive vulnerable to further global disruptions in South East Asia.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, Thrifty Automotive 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Thrifty Automotive can use these opportunities to build new business models that can help the communities that Thrifty Automotive operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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.
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.
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.
Developing new processes and practices
– Thrifty Automotive can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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. Thrifty Automotive can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Thrifty Automotive 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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Thrifty Automotive can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
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.
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.
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. Thrifty Automotive 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.
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.
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.
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 Thrifty Automotive 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 Thrifty Automotive 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 Thrifty Automotive with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Consumer confidence and its impact on Thrifty Automotive 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.
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 .
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.