DataXu served marketers by buying digital advertising for brands using its demand-side platform. It sought a way to build a more predictable revenue stream in the very transactional media marketplace, and hoped that two new marketing analytics products would give it a more predictable revenue stream. But sales were behind forecast. DataXu's large brand and advertising agency clients found the new products interesting, but evidence suggested that their buying processes might be incompatible with the recurring sales model DataXu wanted to implement. Will DataXu need to change its sales organization, pricing approach, or hiring criteria to sell the new products?
Authors :: Frank V. Cespedes, John Deighton, Lisa Cox, Olivia Hull
Swot Analysis of "DataXu: Selling Ad Tech" written by Frank V. Cespedes, John Deighton, Lisa Cox, Olivia Hull includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dataxu Predictable facing as an external strategic factors. Some of the topics covered in DataXu: Selling Ad Tech case study are - Strategic Management Strategies, Marketing, Pricing, Technology and Sales & Marketing.
Some of the macro environment factors that can be used to understand the DataXu: Selling Ad Tech casestudy better are - – increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing energy prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of DataXu: Selling Ad Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DataXu: Selling Ad Tech case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dataxu Predictable, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dataxu Predictable 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 DataXu: Selling Ad Tech can be done for the following purposes –
1. Strategic planning using facts provided in DataXu: Selling Ad Tech case study
2. Improving business portfolio management of Dataxu Predictable
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 Dataxu Predictable
Strengths DataXu: Selling Ad Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dataxu Predictable in DataXu: Selling Ad Tech Harvard Business Review case study are -
Ability to recruit top talent
– Dataxu Predictable is one of the leading recruiters in the industry. Managers in the DataXu: Selling Ad Tech are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Dataxu Predictable 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 Dataxu Predictable is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in DataXu: Selling Ad Tech Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Dataxu Predictable
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dataxu Predictable does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Dataxu Predictable 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 DataXu: Selling Ad Tech HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Dataxu Predictable in the sector have low bargaining power. DataXu: Selling Ad Tech has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dataxu Predictable to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Dataxu Predictable has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dataxu Predictable 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
– Dataxu Predictable has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in DataXu: Selling Ad Tech 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.
Sustainable margins compare to other players in Sales & Marketing industry
– DataXu: Selling Ad Tech firm has clearly differentiated products in the market place. This has enabled Dataxu Predictable to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Dataxu Predictable to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the DataXu: Selling Ad Tech 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 Dataxu Predictable digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dataxu Predictable 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.
Effective Research and Development (R&D)
– Dataxu Predictable 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 DataXu: Selling Ad Tech - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Dataxu Predictable 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.
Weaknesses DataXu: Selling Ad Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DataXu: Selling Ad Tech are -
Low market penetration in new markets
– Outside its home market of Dataxu Predictable, firm in the HBR case study DataXu: Selling Ad Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study DataXu: Selling Ad Tech, it seems that the employees of Dataxu Predictable 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.
Products dominated business model
– Even though Dataxu Predictable 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 - DataXu: Selling Ad Tech should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study DataXu: Selling Ad Tech 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 DataXu: Selling Ad Tech can leverage the sales team experience to cultivate customer relationships as Dataxu Predictable is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the DataXu: Selling Ad Tech 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 Dataxu Predictable has relatively successful track record of launching new products.
High cash cycle compare to competitors
Dataxu Predictable 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.
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 Dataxu Predictable supply chain. Even after few cautionary changes mentioned in the HBR case study - DataXu: Selling Ad Tech, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dataxu Predictable vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study DataXu: Selling Ad Tech, is just above the industry average. Dataxu Predictable 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Frank V. Cespedes, John Deighton, Lisa Cox, Olivia Hull suggests that, Dataxu Predictable 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.
Lack of clear differentiation of Dataxu Predictable products
– To increase the profitability and margins on the products, Dataxu Predictable 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 Dataxu Predictable 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.
Opportunities DataXu: Selling Ad Tech | 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 DataXu: Selling Ad Tech are -
Creating value in data economy
– The success of analytics program of Dataxu Predictable has opened avenues for new revenue streams for the organization in the industry. This can help Dataxu Predictable to build a more holistic ecosystem as suggested in the DataXu: Selling Ad Tech case study. Dataxu Predictable can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dataxu Predictable 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 Dataxu Predictable to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dataxu Predictable 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Dataxu Predictable can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dataxu Predictable 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.
Buying journey improvements
– Dataxu Predictable can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DataXu: Selling Ad Tech 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
– Dataxu Predictable 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.
Better consumer reach
– The expansion of the 5G network will help Dataxu Predictable to increase its market reach. Dataxu Predictable 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.
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 Dataxu Predictable 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.
Manufacturing automation
– Dataxu Predictable can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dataxu Predictable 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, DataXu: Selling Ad Tech, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Dataxu Predictable 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.
Building a culture of innovation
– managers at Dataxu Predictable 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.
Threats DataXu: Selling Ad Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DataXu: Selling Ad Tech are -
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 Dataxu Predictable.
Environmental challenges
– Dataxu Predictable 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. Dataxu Predictable can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing wage structure of Dataxu Predictable
– 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 Dataxu Predictable.
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. Dataxu Predictable needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Dataxu Predictable is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study DataXu: Selling Ad Tech, Dataxu Predictable 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 .
High dependence on third party suppliers
– Dataxu Predictable 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.
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 Dataxu Predictable business can come under increasing regulations regarding data privacy, data security, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Dataxu Predictable has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Dataxu Predictable 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dataxu Predictable 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dataxu Predictable 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 DataXu: Selling Ad Tech .
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. Dataxu Predictable 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.
Weighted SWOT Analysis of DataXu: Selling Ad Tech 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 DataXu: Selling Ad Tech 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 DataXu: Selling Ad Tech 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 DataXu: Selling Ad Tech 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 DataXu: Selling Ad Tech 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 Dataxu Predictable needs to make to build a sustainable competitive advantage.