This exercise is meant to assess students' level of confidence around everyday business and general knowledge questions, for the purpose of identifying where they are overconfident and underconfident.
Swot Analysis of "Exercise on Estimation" written by Jason Riis, John T. Gourville includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Overconfident Underconfident facing as an external strategic factors. Some of the topics covered in Exercise on Estimation case study are - Strategic Management Strategies, Forecasting and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Exercise on Estimation casestudy better are - – there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%,
talent flight as more people leaving formal jobs, increasing commodity prices, etc
Introduction to SWOT Analysis of Exercise on Estimation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Exercise on Estimation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Overconfident Underconfident, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Overconfident Underconfident 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 Exercise on Estimation can be done for the following purposes –
1. Strategic planning using facts provided in Exercise on Estimation case study
2. Improving business portfolio management of Overconfident Underconfident
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 Overconfident Underconfident
Strengths Exercise on Estimation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Overconfident Underconfident in Exercise on Estimation Harvard Business Review case study are -
High switching costs
– The high switching costs that Overconfident Underconfident 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.
Cross disciplinary teams
– Horizontal connected teams at the Overconfident Underconfident 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.
Diverse revenue streams
– Overconfident Underconfident is present in almost all the verticals within the industry. This has provided firm in Exercise on Estimation 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.
Strong track record of project management
– Overconfident Underconfident is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Overconfident Underconfident has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Overconfident Underconfident to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Overconfident Underconfident in the sector have low bargaining power. Exercise on Estimation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Overconfident Underconfident to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Overconfident Underconfident 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 Exercise on Estimation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Overconfident Underconfident has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Overconfident Underconfident 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.
Superior customer experience
– The customer experience strategy of Overconfident Underconfident in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Overconfident Underconfident has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Exercise on Estimation 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.
Effective Research and Development (R&D)
– Overconfident Underconfident 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 Exercise on Estimation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Sales & Marketing industry
– Exercise on Estimation firm has clearly differentiated products in the market place. This has enabled Overconfident Underconfident to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Overconfident Underconfident to invest into research and development (R&D) and innovation.
Weaknesses Exercise on Estimation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Exercise on Estimation are -
Interest costs
– Compare to the competition, Overconfident Underconfident 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Overconfident Underconfident is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Exercise on Estimation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Exercise on Estimation, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Overconfident Underconfident needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Need for greater diversity
– Overconfident Underconfident has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High 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 Overconfident Underconfident supply chain. Even after few cautionary changes mentioned in the HBR case study - Exercise on Estimation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Overconfident Underconfident vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Overconfident Underconfident products
– To increase the profitability and margins on the products, Overconfident Underconfident needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Jason Riis, John T. Gourville suggests that, Overconfident Underconfident 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.
Increasing silos among functional specialists
– The organizational structure of Overconfident Underconfident is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Overconfident Underconfident needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Overconfident Underconfident to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Overconfident Underconfident, firm in the HBR case study Exercise on Estimation 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 Exercise on Estimation, in the dynamic environment Overconfident Underconfident has struggled to respond to the nimble upstart competition. Overconfident Underconfident has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Exercise on Estimation | 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 Exercise on Estimation are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Overconfident Underconfident 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Overconfident Underconfident 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 Overconfident Underconfident has opened avenues for new revenue streams for the organization in the industry. This can help Overconfident Underconfident to build a more holistic ecosystem as suggested in the Exercise on Estimation case study. Overconfident Underconfident can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Overconfident Underconfident 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.
Buying journey improvements
– Overconfident Underconfident can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Exercise on Estimation 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Overconfident Underconfident 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, Exercise on Estimation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Overconfident Underconfident can use these opportunities to build new business models that can help the communities that Overconfident Underconfident operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Overconfident Underconfident 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Overconfident Underconfident can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Overconfident Underconfident can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Overconfident Underconfident 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.
Using analytics as competitive advantage
– Overconfident Underconfident 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 Exercise on Estimation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Overconfident Underconfident to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Overconfident Underconfident 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 Overconfident Underconfident to hire the very best people irrespective of their geographical location.
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 Overconfident Underconfident in the consumer business. Now Overconfident Underconfident can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Exercise on Estimation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Exercise on Estimation are -
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
– Overconfident Underconfident has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Overconfident Underconfident 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.
High dependence on third party suppliers
– Overconfident Underconfident 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.
Regulatory challenges
– Overconfident Underconfident 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 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Exercise on Estimation, Overconfident Underconfident 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 .
Environmental challenges
– Overconfident Underconfident 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. Overconfident Underconfident can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Overconfident Underconfident 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 Overconfident Underconfident
– 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 Overconfident Underconfident.
Stagnating economy with rate increase
– Overconfident Underconfident 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.
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 Overconfident Underconfident in the Sales & Marketing sector and impact the bottomline 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 Overconfident Underconfident 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.
Shortening product life cycle
– it is one of the major threat that Overconfident Underconfident is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Exercise on Estimation 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 Exercise on Estimation 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 Exercise on Estimation 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 Exercise on Estimation 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 Exercise on Estimation 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 Overconfident Underconfident needs to make to build a sustainable competitive advantage.
