Swot Analysis of "eSurg (A): Negotiating the Start-Up" written by Jay O. Light, Anthony Massaro includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Esurg Supplies facing as an external strategic factors. Some of the topics covered in eSurg (A): Negotiating the Start-Up case study are - Strategic Management Strategies, Negotiations, Venture capital and Finance & Accounting.
Some of the macro environment factors that can be used to understand the eSurg (A): Negotiating the Start-Up casestudy better are - – increasing energy prices, increasing commodity prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of eSurg (A): Negotiating the Start-Up
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in eSurg (A): Negotiating the Start-Up case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Esurg Supplies, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Esurg Supplies 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 eSurg (A): Negotiating the Start-Up can be done for the following purposes –
1. Strategic planning using facts provided in eSurg (A): Negotiating the Start-Up case study
2. Improving business portfolio management of Esurg Supplies
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 Esurg Supplies
Strengths eSurg (A): Negotiating the Start-Up | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Esurg Supplies in eSurg (A): Negotiating the Start-Up Harvard Business Review case study are -
High switching costs
– The high switching costs that Esurg Supplies 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.
Training and development
– Esurg Supplies has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in eSurg (A): Negotiating the Start-Up 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.
Successful track record of launching new products
– Esurg Supplies has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Esurg Supplies 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
– Esurg Supplies is one of the leading recruiters in the industry. Managers in the eSurg (A): Negotiating the Start-Up are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Esurg Supplies is one of the most innovative firm in sector. Manager in eSurg (A): Negotiating the Start-Up Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Finance & Accounting industry
– eSurg (A): Negotiating the Start-Up firm has clearly differentiated products in the market place. This has enabled Esurg Supplies to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Esurg Supplies to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Esurg Supplies 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 eSurg (A): Negotiating the Start-Up HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Esurg Supplies is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Esurg Supplies 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 eSurg (A): Negotiating the Start-Up - 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 Esurg Supplies 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.
Low bargaining power of suppliers
– Suppliers of Esurg Supplies in the sector have low bargaining power. eSurg (A): Negotiating the Start-Up has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Esurg Supplies to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Finance & Accounting field
– Esurg Supplies 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 Esurg Supplies in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses eSurg (A): Negotiating the Start-Up | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of eSurg (A): Negotiating the Start-Up are -
High bargaining power of channel partners
– Because of the regulatory requirements, Jay O. Light, Anthony Massaro suggests that, Esurg Supplies 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.
High operating costs
– Compare to the competitors, firm in the HBR case study eSurg (A): Negotiating the Start-Up 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 Esurg Supplies 's lucrative customers.
Aligning sales with marketing
– It come across in the case study eSurg (A): Negotiating the Start-Up 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 eSurg (A): Negotiating the Start-Up can leverage the sales team experience to cultivate customer relationships as Esurg Supplies is planning to shift buying processes online.
Lack of clear differentiation of Esurg Supplies products
– To increase the profitability and margins on the products, Esurg Supplies needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Esurg Supplies, firm in the HBR case study eSurg (A): Negotiating the Start-Up 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 eSurg (A): Negotiating the Start-Up, in the dynamic environment Esurg Supplies has struggled to respond to the nimble upstart competition. Esurg Supplies has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Esurg Supplies 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 - eSurg (A): Negotiating the Start-Up should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Esurg Supplies has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study eSurg (A): Negotiating the Start-Up, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Interest costs
– Compare to the competition, Esurg Supplies 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.
Increasing silos among functional specialists
– The organizational structure of Esurg Supplies is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Esurg Supplies needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Esurg Supplies to focus more on services rather than just following the product oriented approach.
Opportunities eSurg (A): Negotiating the Start-Up | 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 eSurg (A): Negotiating the Start-Up are -
Developing new processes and practices
– Esurg Supplies 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.
Creating value in data economy
– The success of analytics program of Esurg Supplies has opened avenues for new revenue streams for the organization in the industry. This can help Esurg Supplies to build a more holistic ecosystem as suggested in the eSurg (A): Negotiating the Start-Up case study. Esurg Supplies can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Esurg Supplies can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Esurg Supplies is facing challenges because of the dominance of functional experts in the organization. eSurg (A): Negotiating the Start-Up 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.
Loyalty marketing
– Esurg Supplies 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.
Better consumer reach
– The expansion of the 5G network will help Esurg Supplies to increase its market reach. Esurg Supplies 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 Esurg Supplies in the consumer business. Now Esurg Supplies can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Esurg Supplies 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 eSurg (A): Negotiating the Start-Up - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Esurg Supplies to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Esurg Supplies can use these opportunities to build new business models that can help the communities that Esurg Supplies operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Esurg Supplies 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Esurg Supplies 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.
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. Esurg Supplies can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Esurg Supplies 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.
Threats eSurg (A): Negotiating the Start-Up External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study eSurg (A): Negotiating the Start-Up are -
High dependence on third party suppliers
– Esurg Supplies 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.
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.
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 Esurg Supplies business can come under increasing regulations regarding data privacy, data security, 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 eSurg (A): Negotiating the Start-Up, Esurg Supplies may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Consumer confidence and its impact on Esurg Supplies 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 Esurg Supplies in the Finance & Accounting industry. The Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Esurg Supplies with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Esurg Supplies
– 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 Esurg Supplies.
Environmental challenges
– Esurg Supplies 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. Esurg Supplies 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 Esurg Supplies.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Esurg Supplies 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 eSurg (A): Negotiating the Start-Up .
Stagnating economy with rate increase
– Esurg Supplies 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 eSurg (A): Negotiating the Start-Up 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 eSurg (A): Negotiating the Start-Up 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 eSurg (A): Negotiating the Start-Up 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 eSurg (A): Negotiating the Start-Up 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 eSurg (A): Negotiating the Start-Up 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 Esurg Supplies needs to make to build a sustainable competitive advantage.