Verne Global: Building a Green Data Center in Iceland SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Verne Global: Building a Green Data Center in Iceland
Verne Global, a pioneering startup created to build the first large-scale data center in Iceland, faces critical challenges regarding its green strategy. Verne Co-Founder Isaac Kato is tasked with evaluating how the company can most successfully market and sell the green components of its service offering. Using only renewable energy in its data center facility, Verne can drastically reduce customers' carbon emissions, enabling customers to meet emerging government regulations and to capture the financial benefit of public goodwill arising from green initiatives. But how valuable are Verne's green benefits, and are they sufficient to compel customers to pay a premium for Verne services? Further, how can Verne best integrate its green strategy into its marketing and sales message? Finally, will Verne's green benefits enable the company to overcome obstacles in the sales process, or will they alternatively overcomplicate an already complex sales message? Kato's decision allows discussion of the emerging role of green marketing and sales and helps identify how a product or service which is good for the environment can also be good for the bottom line.
Swot Analysis of "Verne Global: Building a Green Data Center in Iceland" written by Thomas Steenburgh, Nnamdi Okike includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Verne Green facing as an external strategic factors. Some of the topics covered in Verne Global: Building a Green Data Center in Iceland case study are - Strategic Management Strategies, Marketing, Operations management, Sales, Sustainability and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Verne Global: Building a Green Data Center in Iceland casestudy better are - – wage bills are increasing, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Verne Global: Building a Green Data Center in Iceland
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Verne Global: Building a Green Data Center in Iceland case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Verne Green, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Verne Green 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 Verne Global: Building a Green Data Center in Iceland can be done for the following purposes –
1. Strategic planning using facts provided in Verne Global: Building a Green Data Center in Iceland case study
2. Improving business portfolio management of Verne Green
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Verne Green
Strengths Verne Global: Building a Green Data Center in Iceland | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Verne Green in Verne Global: Building a Green Data Center in Iceland Harvard Business Review case study are -
Effective Research and Development (R&D)
– Verne Green 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 Verne Global: Building a Green Data Center in Iceland - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Verne Green is one of the most innovative firm in sector. Manager in Verne Global: Building a Green Data Center in Iceland Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Verne Green is one of the leading recruiters in the industry. Managers in the Verne Global: Building a Green Data Center in Iceland are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Sales & Marketing field
– Verne Green 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 Verne Green 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 Verne Green in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Sales & Marketing industry
– Verne Global: Building a Green Data Center in Iceland firm has clearly differentiated products in the market place. This has enabled Verne Green to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Verne Green to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Verne Green is present in almost all the verticals within the industry. This has provided firm in Verne Global: Building a Green Data Center in Iceland 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.
Operational resilience
– The operational resilience strategy in the Verne Global: Building a Green Data Center in Iceland 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Verne Green digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Verne Green 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.
Training and development
– Verne Green has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Verne Global: Building a Green Data Center in Iceland 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.
Strong track record of project management
– Verne Green is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Verne Green 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 Verne Global: Building a Green Data Center in Iceland HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Verne Global: Building a Green Data Center in Iceland | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Verne Global: Building a Green Data Center in Iceland are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Verne Global: Building a Green Data Center in Iceland, it seems that the employees of Verne Green 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.
Low market penetration in new markets
– Outside its home market of Verne Green, firm in the HBR case study Verne Global: Building a Green Data Center in Iceland needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Verne Global: Building a Green Data Center in Iceland, in the dynamic environment Verne Green has struggled to respond to the nimble upstart competition. Verne Green has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Verne Global: Building a Green Data Center in Iceland, is just above the industry average. Verne Green 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.
Increasing silos among functional specialists
– The organizational structure of Verne Green is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Verne Green needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Verne Green to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Verne Green products
– To increase the profitability and margins on the products, Verne Green needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Verne Green 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.
Slow decision making process
– As mentioned earlier in the report, Verne Green 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. Verne Green 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.
No frontier risks strategy
– After analyzing the HBR case study Verne Global: Building a Green Data Center in Iceland, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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 star products
– The top 2 products and services of the firm as mentioned in the Verne Global: Building a Green Data Center in Iceland 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 Verne Green has relatively successful track record of launching new products.
Products dominated business model
– Even though Verne Green 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 - Verne Global: Building a Green Data Center in Iceland should strive to include more intangible value offerings along with its core products and services.
Opportunities Verne Global: Building a Green Data Center in Iceland | 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 Verne Global: Building a Green Data Center in Iceland are -
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 Verne Green 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Verne Green can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Verne Green has opened avenues for new revenue streams for the organization in the industry. This can help Verne Green to build a more holistic ecosystem as suggested in the Verne Global: Building a Green Data Center in Iceland case study. Verne Green can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Verne Green to increase its market reach. Verne Green 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.
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 Verne Green in the consumer business. Now Verne Green can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Verne Green 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.
Learning at scale
– Online learning technologies has now opened space for Verne Green 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.
Using analytics as competitive advantage
– Verne Green 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 Verne Global: Building a Green Data Center in Iceland - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Verne Green to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Verne Green 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, Verne Global: Building a Green Data Center in Iceland, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Verne Green 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 Verne Green to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Verne Green is facing challenges because of the dominance of functional experts in the organization. Verne Global: Building a Green Data Center in Iceland 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.
Developing new processes and practices
– Verne Green can develop new processes and procedures in Sales & Marketing 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.
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. Verne Green can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Verne Global: Building a Green Data Center in Iceland External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Verne Global: Building a Green Data Center in Iceland are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Verne Global: Building a Green Data Center in Iceland, Verne Green may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Verne Green in the Sales & Marketing industry. The Sales & Marketing 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.
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 Verne Green in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing wage structure of Verne Green
– 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 Verne Green.
Stagnating economy with rate increase
– Verne Green 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Verne Green 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 Verne Global: Building a Green Data Center in Iceland .
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. Verne Green 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.
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. Verne Green needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Consumer confidence and its impact on Verne Green 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.
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 Verne Green.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Verne Green with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Verne Global: Building a Green Data Center in Iceland 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 Verne Global: Building a Green Data Center in Iceland 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 Verne Global: Building a Green Data Center in Iceland 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 Verne Global: Building a Green Data Center in Iceland 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 Verne Global: Building a Green Data Center in Iceland 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 Verne Green needs to make to build a sustainable competitive advantage.
