This is an MIT Sloan Management Review article. In the digital age, we are inundated with other people's opinions. We browse books on Amazon with awareness of how other customers liked (or disliked) a particular tome. On Expedia, we compare hotels based on user ratings. On YouTube, we can check out a video's thumbs-up/thumbs-down score to help determine if it's worth our time.For the most part, consumers have faith in online ratings and view them as trustworthy. But, the author argues, this trust may be misplaced. The heart of the problem lies with our herd instincts -natural human impulses characterized by a lack of individual decision making -that cause us to think and act in the same way as other people around us. When it comes to online ratings, our herd instincts combine with our susceptibility to positive "social influence."When we see that other people have appreciated a certain book, enjoyed a hotel or restaurant or liked a particular doctor, this can cause us to feel the same positive feelings and to provide a similarly high online rating. The author describes an experiment that he and two colleagues conducted on a social news-aggregation website. On the site, users rate news articles and comments by voting them up or down based on how much they enjoyed them. The researchers randomly manipulated the scores of comments with a single up or down vote and then measured the impact of these small manipulations on subsequent scores. The results were striking. The positive manipulations created a positive social influence bias that persisted over five months and that ultimately increased the comments'final ratings by 25%. Negatively manipulated scores, meanwhile, were offset by a correction effect that neutralized the manipulation: Although viewers of negatively manipulated comments were more likely to vote negative (evidence of negative herding), they were even more likely to positively "correct"what they saw as an undeserved negative score. This social-influence bias snowballs into disproportionately high scores, creating a tendency toward positive ratings bubbles. Positively manipulated scores were 30% more likely than control comments (the comments that the researchers did not manipulate) to reach or exceed a score of 10. A positive vote didn't just affect the mean of the ratings distribution; it pushed the upper tail of the distribution out as well, meaning a single positive vote at the beginning could propel comments to ratings stardom.
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Case Analysis of The Problem With Online Ratings
The Problem With Online Ratings is a Harvard Business (HBR) Case Study on Sales & Marketing , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. The Problem With Online Ratings is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. The Problem With Online Ratings case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. The Problem With Online Ratings will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.
Case Study Solutions Background Work
The Problem With Online Ratings
case study solution
is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Sales & Marketing, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of The Problem With Online Ratings, is to not only build a competitive position of the organization but also to sustain it over a period of time.
Strategic Management Tools Used in Case Study Solution
The The Problem With Online Ratings case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
Texas Business School Approach to Sales & Marketing Solutions
In the Texas Business School, The Problem With Online Ratings case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – The Problem With Online Ratings
Step 1 – Problem Identification of The Problem With Online Ratings - Harvard Business School Case Study
The first step to solve HBR The Problem With Online Ratings case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Ratings Comments is facing right now. Even though the problem statement is essentially – “Sales & Marketing” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Ratings Comments, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.
Step 2 – External Environment Analysis
Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the The Problem With Online Ratings.
The external environment analysis of The Problem With Online Ratings will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.
What is PESTEL Analysis? Briefly Explained
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in The Problem With Online Ratings case study. PESTEL analysis of " The Problem With Online Ratings" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?
As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with The Problem With Online Ratings macro-environment and how it impacts the businesses of the firm.
How to do PESTEL Analysis for The Problem With Online Ratings
To do comprehensive PESTEL analysis of case study – The Problem With Online Ratings , we have researched numerous components under the six factors of PESTEL analysis.
Political Factors that Impact The Problem With Online Ratings
Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.
Policy Making Impact on The Problem With Online Ratings
Government policies have significant impact on the business environment of any country. The firm in “ The Problem With Online Ratings ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.
Data safety laws – The countries in which Ratings Comments is operating, firms are required to store customer data within the premises of the country. Ratings Comments needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.
Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. The Problem With Online Ratings has numerous instances where the competition regulations aspects can be scrutinized.
Import restrictions on products – Before entering the new market, Ratings Comments in case study The Problem With Online Ratings" should look into the import restrictions that may be present in the prospective market.
Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Ratings Comments in case study “ The Problem With Online Ratings ” should look into these export restrictions policies.
Foreign Direct Investment Policies – Government policies favors local companies over international policies, Ratings Comments in case study “ The Problem With Online Ratings ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.
Taxation & Regulation Impact on The Problem With Online Ratings
Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.
Tariffs – Chekout how much tariffs the firm needs to pay in the “ The Problem With Online Ratings ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Ratings Comments can compete against other competitors.
Government Scheme & Subsidies Impact on The Problem With Online Ratings
Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at The Problem With Online Ratings case study have to assess whether their business can benefit from such government assistance and subsidies.
Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.
Political System & Stability, and its Impact on The Problem With Online Ratings
Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.
Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.
Corruption level – Ratings Comments needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.
Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.
Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.
Economic Factors that Impact The Problem With Online Ratings
Social Factors that Impact The Problem With Online Ratings
Technological Factors that Impact The Problem With Online Ratings
Environmental Factors that Impact The Problem With Online Ratings
Legal Factors that Impact The Problem With Online Ratings
Step 3 – Industry Specific Analysis
What is Porter Five Forces Analysis
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in The Problem With Online Ratings case study. PESTEL analysis of " The Problem With Online Ratings" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
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