Smartex: An Electronic Cash System SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Smartex: An Electronic Cash System
Mercantile Bank of Australia, together with six other Australian banks, acquired a license to issue Smartex, a smart-card-based electronic cash system, in Australia. Australia had been a popular country for conducting smart-card trials because it possessed a sophisticated telecommunications infrastructure and a highly urbanized population that had demonstrated keenness toward adopting new technologies. The case examines the process used by Smartex licensees to develop and launch Smartex in Australia. Also, the second-generation Smartex chip, which has a multifunctional capability, will soon be available. How should the Smartex licensees promote this new chip to make use of its enhanced capability without confusing consumers?
Authors :: Ali F. Farhoomand, Gerard Tocquer, Eva Y.H. Kwan
Swot Analysis of "Smartex: An Electronic Cash System" written by Ali F. Farhoomand, Gerard Tocquer, Eva Y.H. Kwan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Smartex Australia facing as an external strategic factors. Some of the topics covered in Smartex: An Electronic Cash System case study are - Strategic Management Strategies, Innovation and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Smartex: An Electronic Cash System casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, technology disruption, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Smartex: An Electronic Cash System
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Smartex: An Electronic Cash System case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Smartex Australia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Smartex Australia 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 Smartex: An Electronic Cash System can be done for the following purposes –
1. Strategic planning using facts provided in Smartex: An Electronic Cash System case study
2. Improving business portfolio management of Smartex Australia
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 Smartex Australia
Strengths Smartex: An Electronic Cash System | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Smartex Australia in Smartex: An Electronic Cash System Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Smartex Australia are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Smartex Australia 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 Ali F. Farhoomand, Gerard Tocquer, Eva Y.H. Kwan 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.
Diverse revenue streams
– Smartex Australia is present in almost all the verticals within the industry. This has provided firm in Smartex: An Electronic Cash System 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.
Innovation driven organization
– Smartex Australia is one of the most innovative firm in sector. Manager in Smartex: An Electronic Cash System Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Smartex: An Electronic Cash System 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.
Learning organization
- Smartex Australia 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 Smartex Australia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Smartex: An Electronic Cash System Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Sales & Marketing industry
– Smartex: An Electronic Cash System firm has clearly differentiated products in the market place. This has enabled Smartex Australia to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Smartex Australia to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Smartex Australia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Smartex Australia 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.
Ability to recruit top talent
– Smartex Australia is one of the leading recruiters in the industry. Managers in the Smartex: An Electronic Cash System are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Smartex Australia in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Smartex Australia in the sector have low bargaining power. Smartex: An Electronic Cash System has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Smartex Australia to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Smartex Australia 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 Smartex: An Electronic Cash System HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Smartex: An Electronic Cash System | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Smartex: An Electronic Cash System are -
High bargaining power of channel partners
– Because of the regulatory requirements, Ali F. Farhoomand, Gerard Tocquer, Eva Y.H. Kwan suggests that, Smartex Australia 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, Smartex Australia 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.
Lack of clear differentiation of Smartex Australia products
– To increase the profitability and margins on the products, Smartex Australia needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Smartex: An Electronic Cash System, 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 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 Smartex Australia supply chain. Even after few cautionary changes mentioned in the HBR case study - Smartex: An Electronic Cash System, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Smartex Australia vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Smartex: An Electronic Cash System 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 Smartex Australia has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Smartex: An Electronic Cash System 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 Smartex: An Electronic Cash System can leverage the sales team experience to cultivate customer relationships as Smartex Australia is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Smartex: An Electronic Cash System HBR case study mentions - Smartex Australia 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Smartex: An Electronic Cash System, it seems that the employees of Smartex Australia 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Smartex Australia is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Smartex: An Electronic Cash System can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Smartex: An Electronic Cash System 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 Smartex Australia 's lucrative customers.
Opportunities Smartex: An Electronic Cash System | 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 Smartex: An Electronic Cash System are -
Buying journey improvements
– Smartex Australia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Smartex: An Electronic Cash System 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.
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 Smartex Australia in the consumer business. Now Smartex Australia can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Smartex Australia 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 Sales & Marketing segment.
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. Smartex Australia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Smartex Australia 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 Smartex Australia to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Smartex Australia to increase its market reach. Smartex Australia 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Smartex Australia is facing challenges because of the dominance of functional experts in the organization. Smartex: An Electronic Cash System 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Smartex Australia 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.
Loyalty marketing
– Smartex Australia 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.
Creating value in data economy
– The success of analytics program of Smartex Australia has opened avenues for new revenue streams for the organization in the industry. This can help Smartex Australia to build a more holistic ecosystem as suggested in the Smartex: An Electronic Cash System case study. Smartex Australia can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Smartex Australia 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Smartex Australia in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing 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 Smartex Australia 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.
Threats Smartex: An Electronic Cash System External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Smartex: An Electronic Cash System are -
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.
Regulatory challenges
– Smartex Australia 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 Sales & Marketing industry regulations.
Technology acceleration in Forth Industrial Revolution
– Smartex Australia has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Smartex Australia needs to keep up with the evolution of technology in the Sales & Marketing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Smartex Australia 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 Smartex: An Electronic Cash System .
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 Smartex Australia.
Environmental challenges
– Smartex Australia 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. Smartex Australia can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Smartex Australia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Smartex Australia business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Smartex Australia is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Smartex Australia
– 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 Smartex Australia.
Consumer confidence and its impact on Smartex Australia 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Smartex Australia 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.
Weighted SWOT Analysis of Smartex: An Electronic Cash System 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 Smartex: An Electronic Cash System 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 Smartex: An Electronic Cash System 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 Smartex: An Electronic Cash System 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 Smartex: An Electronic Cash System 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 Smartex Australia needs to make to build a sustainable competitive advantage.