E-business Transformation At the Crossroads: Sears' Dilemma SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of E-business Transformation At the Crossroads: Sears' Dilemma
This teaching case discusses the challenges facing Sears, Reobeck and Co., a leading retailer in United States, in its efforts to transform itself into an effective brick-and-click organization. In face of intense competition from other retailers and online e-tailers, Sears has continually expanded its online efforts in e-business transformation. This case traces the key e-business initiatives taken by Sears and highlights significant managerial challenges that were encountered during the formulation and execution of an effective e-business transformation strategy. The case presents the issues faced by a new CIO who had taken over the technology and e-business affairs at Sears at the end of 2002.
Authors :: C. Ranganathan, Shetty Analini, Gayathri Muthukumaran
Swot Analysis of "E-business Transformation At the Crossroads: Sears' Dilemma" written by C. Ranganathan, Shetty Analini, Gayathri Muthukumaran includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sears Transformation facing as an external strategic factors. Some of the topics covered in E-business Transformation At the Crossroads: Sears' Dilemma case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the E-business Transformation At the Crossroads: Sears' Dilemma casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
increasing commodity prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of E-business Transformation At the Crossroads: Sears' Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in E-business Transformation At the Crossroads: Sears' Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sears Transformation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sears Transformation 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 E-business Transformation At the Crossroads: Sears' Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in E-business Transformation At the Crossroads: Sears' Dilemma case study
2. Improving business portfolio management of Sears Transformation
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 Sears Transformation
Strengths E-business Transformation At the Crossroads: Sears' Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sears Transformation in E-business Transformation At the Crossroads: Sears' Dilemma Harvard Business Review case study are -
Strong track record of project management
– Sears Transformation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Sears Transformation in the sector have low bargaining power. E-business Transformation At the Crossroads: Sears' Dilemma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sears Transformation to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Sears Transformation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sears Transformation 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.
Operational resilience
– The operational resilience strategy in the E-business Transformation At the Crossroads: Sears' Dilemma 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.
Organizational Resilience of Sears Transformation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sears Transformation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Leadership & Managing People industry
– E-business Transformation At the Crossroads: Sears' Dilemma firm has clearly differentiated products in the market place. This has enabled Sears Transformation to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Sears Transformation to invest into research and development (R&D) and innovation.
Analytics focus
– Sears Transformation 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 C. Ranganathan, Shetty Analini, Gayathri Muthukumaran 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.
Innovation driven organization
– Sears Transformation is one of the most innovative firm in sector. Manager in E-business Transformation At the Crossroads: Sears' Dilemma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Sears Transformation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Sears Transformation is present in almost all the verticals within the industry. This has provided firm in E-business Transformation At the Crossroads: Sears' Dilemma 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.
Learning organization
- Sears Transformation 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 Sears Transformation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in E-business Transformation At the Crossroads: Sears' Dilemma Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Sears Transformation is one of the leading recruiters in the industry. Managers in the E-business Transformation At the Crossroads: Sears' Dilemma 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 E-business Transformation At the Crossroads: Sears' Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of E-business Transformation At the Crossroads: Sears' Dilemma are -
Products dominated business model
– Even though Sears Transformation 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 - E-business Transformation At the Crossroads: Sears' Dilemma should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Sears Transformation products
– To increase the profitability and margins on the products, Sears Transformation needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the E-business Transformation At the Crossroads: Sears' Dilemma 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 Sears Transformation has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study E-business Transformation At the Crossroads: Sears' Dilemma 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 E-business Transformation At the Crossroads: Sears' Dilemma can leverage the sales team experience to cultivate customer relationships as Sears Transformation is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Sears Transformation, firm in the HBR case study E-business Transformation At the Crossroads: Sears' Dilemma needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, C. Ranganathan, Shetty Analini, Gayathri Muthukumaran suggests that, Sears Transformation 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.
Interest costs
– Compare to the competition, Sears Transformation 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.
High operating costs
– Compare to the competitors, firm in the HBR case study E-business Transformation At the Crossroads: Sears' Dilemma 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 Sears Transformation 's lucrative customers.
Slow to strategic competitive environment developments
– As E-business Transformation At the Crossroads: Sears' Dilemma HBR case study mentions - Sears Transformation 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.
Capital Spending Reduction
– Even during the low interest decade, Sears Transformation 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.
No frontier risks strategy
– After analyzing the HBR case study E-business Transformation At the Crossroads: Sears' Dilemma, 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.
Opportunities E-business Transformation At the Crossroads: Sears' Dilemma | 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 E-business Transformation At the Crossroads: Sears' Dilemma are -
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. Sears Transformation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Sears Transformation to increase its market reach. Sears Transformation 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.
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. Sears Transformation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sears Transformation can use these opportunities to build new business models that can help the communities that Sears Transformation operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Sears Transformation 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sears Transformation can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Sears Transformation can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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 Sears Transformation in the consumer business. Now Sears Transformation can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sears Transformation 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 Sears Transformation to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Sears Transformation has opened avenues for new revenue streams for the organization in the industry. This can help Sears Transformation to build a more holistic ecosystem as suggested in the E-business Transformation At the Crossroads: Sears' Dilemma case study. Sears Transformation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sears Transformation is facing challenges because of the dominance of functional experts in the organization. E-business Transformation At the Crossroads: Sears' Dilemma 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 Sears Transformation 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Sears Transformation to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Sears Transformation 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.
Threats E-business Transformation At the Crossroads: Sears' Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study E-business Transformation At the Crossroads: Sears' Dilemma are -
Shortening product life cycle
– it is one of the major threat that Sears Transformation is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Sears Transformation 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.
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. Sears Transformation needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sears Transformation 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 E-business Transformation At the Crossroads: Sears' Dilemma .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study E-business Transformation At the Crossroads: Sears' Dilemma, Sears Transformation 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 .
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 Sears Transformation business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Sears Transformation 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sears Transformation 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.
High dependence on third party suppliers
– Sears Transformation 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 Sears Transformation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Sears Transformation
– 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 Sears Transformation.
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. Sears Transformation 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.
Weighted SWOT Analysis of E-business Transformation At the Crossroads: Sears' Dilemma 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 E-business Transformation At the Crossroads: Sears' Dilemma 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 E-business Transformation At the Crossroads: Sears' Dilemma 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 E-business Transformation At the Crossroads: Sears' Dilemma 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 E-business Transformation At the Crossroads: Sears' Dilemma 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 Sears Transformation needs to make to build a sustainable competitive advantage.
