Case Study Description of Valuation of EatOnline.Asia
The founder and chief executive officer of Human Touch Connect Pte. Ltd. was hard at work in his office in Singapore. He had been working on the detailed valuation of his latest venture, EatOnline.Asia, to be presented to the partner of Top Line Ventures, a venture capital firm. He was hoping to be able to convince the firm to invest the required amount of SGD1.5 million. The founder wondered what method(s) of valuation he could use to reflect the fair value of the project. The second issue that was troubling him was, in the event that he was successful in convincing Top Line Ventures, how much stake he could offer for an investment of SGD1.5 million. Parvinder K. Arora is affiliated with S P Jain School of Global Management.
Swot Analysis of "Valuation of EatOnline.Asia" written by Parvinder K. Arora includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eatonline.asia Sgd1.5 facing as an external strategic factors. Some of the topics covered in Valuation of EatOnline.Asia case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Valuation of EatOnline.Asia casestudy better are - – cloud computing is disrupting traditional business models, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, wage bills are increasing, there is backlash against globalization, increasing government debt because of Covid-19 spendings,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Valuation of EatOnline.Asia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Valuation of EatOnline.Asia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eatonline.asia Sgd1.5, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eatonline.asia Sgd1.5 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 Valuation of EatOnline.Asia can be done for the following purposes –
1. Strategic planning using facts provided in Valuation of EatOnline.Asia case study
2. Improving business portfolio management of Eatonline.asia Sgd1.5
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eatonline.asia Sgd1.5
Strengths Valuation of EatOnline.Asia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eatonline.asia Sgd1.5 in Valuation of EatOnline.Asia Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Valuation of EatOnline.Asia firm has clearly differentiated products in the market place. This has enabled Eatonline.asia Sgd1.5 to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Eatonline.asia Sgd1.5 to invest into research and development (R&D) and innovation.
Strong track record of project management
– Eatonline.asia Sgd1.5 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Eatonline.asia Sgd1.5 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eatonline.asia Sgd1.5 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Eatonline.asia Sgd1.5 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 Valuation of EatOnline.Asia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Eatonline.asia Sgd1.5 is present in almost all the verticals within the industry. This has provided firm in Valuation of EatOnline.Asia 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.
High switching costs
– The high switching costs that Eatonline.asia Sgd1.5 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.
Highly skilled collaborators
– Eatonline.asia Sgd1.5 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 Valuation of EatOnline.Asia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Eatonline.asia Sgd1.5 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 Eatonline.asia Sgd1.5 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Valuation of EatOnline.Asia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Eatonline.asia Sgd1.5 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eatonline.asia Sgd1.5 has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Eatonline.asia Sgd1.5 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Valuation of EatOnline.Asia 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 lead change in Finance & Accounting field
– Eatonline.asia Sgd1.5 is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Eatonline.asia Sgd1.5 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Eatonline.asia Sgd1.5 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Valuation of EatOnline.Asia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Valuation of EatOnline.Asia are -
Workers concerns about automation
– As automation is fast increasing in the segment, Eatonline.asia Sgd1.5 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.
Need for greater diversity
– Eatonline.asia Sgd1.5 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Valuation of EatOnline.Asia 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 Eatonline.asia Sgd1.5 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Valuation of EatOnline.Asia, is just above the industry average. Eatonline.asia Sgd1.5 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Valuation of EatOnline.Asia, in the dynamic environment Eatonline.asia Sgd1.5 has struggled to respond to the nimble upstart competition. Eatonline.asia Sgd1.5 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Eatonline.asia Sgd1.5 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. Eatonline.asia Sgd1.5 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.
Low market penetration in new markets
– Outside its home market of Eatonline.asia Sgd1.5, firm in the HBR case study Valuation of EatOnline.Asia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Valuation of EatOnline.Asia 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 Valuation of EatOnline.Asia can leverage the sales team experience to cultivate customer relationships as Eatonline.asia Sgd1.5 is planning to shift buying processes online.
Interest costs
– Compare to the competition, Eatonline.asia Sgd1.5 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Valuation of EatOnline.Asia, it seems that the employees of Eatonline.asia Sgd1.5 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
Eatonline.asia Sgd1.5 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.
Opportunities Valuation of EatOnline.Asia | 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 Valuation of EatOnline.Asia are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Eatonline.asia Sgd1.5 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Buying journey improvements
– Eatonline.asia Sgd1.5 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Valuation of EatOnline.Asia 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.
Developing new processes and practices
– Eatonline.asia Sgd1.5 can develop new processes and procedures in Finance & Accounting 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Eatonline.asia Sgd1.5 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Eatonline.asia Sgd1.5 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Eatonline.asia Sgd1.5 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.
Better consumer reach
– The expansion of the 5G network will help Eatonline.asia Sgd1.5 to increase its market reach. Eatonline.asia Sgd1.5 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Eatonline.asia Sgd1.5 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eatonline.asia Sgd1.5 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 Eatonline.asia Sgd1.5 to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eatonline.asia Sgd1.5 can use these opportunities to build new business models that can help the communities that Eatonline.asia Sgd1.5 operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Manufacturing automation
– Eatonline.asia Sgd1.5 can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Eatonline.asia Sgd1.5 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.
Building a culture of innovation
– managers at Eatonline.asia Sgd1.5 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 Finance & Accounting segment.
Threats Valuation of EatOnline.Asia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Valuation of EatOnline.Asia are -
Regulatory challenges
– Eatonline.asia Sgd1.5 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 Finance & Accounting industry regulations.
Environmental challenges
– Eatonline.asia Sgd1.5 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. Eatonline.asia Sgd1.5 can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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 Eatonline.asia Sgd1.5.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Eatonline.asia Sgd1.5 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Eatonline.asia Sgd1.5 is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Eatonline.asia Sgd1.5 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eatonline.asia Sgd1.5 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 Valuation of EatOnline.Asia .
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 Eatonline.asia Sgd1.5 business can come under increasing regulations regarding data privacy, data security, etc.
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. Eatonline.asia Sgd1.5 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.
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 Eatonline.asia Sgd1.5 in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Eatonline.asia Sgd1.5 has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Eatonline.asia Sgd1.5 needs to keep up with the evolution of technology in the Finance & Accounting 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.
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.
Stagnating economy with rate increase
– Eatonline.asia Sgd1.5 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.
Weighted SWOT Analysis of Valuation of EatOnline.Asia 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 Valuation of EatOnline.Asia 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 Valuation of EatOnline.Asia 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 Valuation of EatOnline.Asia 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 Valuation of EatOnline.Asia 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 Eatonline.asia Sgd1.5 needs to make to build a sustainable competitive advantage.
