Online Reputation Systems: How to Design One That Does What You Need SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Online Reputation Systems: How to Design One That Does What You Need
This is an MIT Sloan Management Review article. User-generated content platforms, open source software, crowdsourcing and knowledge markets -these are all possible only because of the "social web," the interlinked virtual universe that to so many executives seems to offer the irresistible promise of providing something -ideas, work, decisions -for (almost) nothing, if only they could manage it right. Managing it right means understanding that even though the new platforms are all about harnessing crowds and communities, in the end those crowds and communities are nothing but a sum of individuals. And your company's social web efforts will succeed only to the extent that you are able to attract good individuals, motivate them to perform good work, and empower them to get to know and trust one another enough to collaborate toward the end goals of the community. The question is, How do you do that? The answer: by capitalizing on the motivational power of in reputation -that is, by designing and building an online reputation system that triggers and nourishes the kind of web community that will serve your company's needs. Using examples such as Amazon, eBay, Epinions and Yelp, the author describes how design choices of a reputation system can profoundly affect a community's culture, making an otherwise collaborative and cordial community into a competitive and even combative space.
Swot Analysis of "Online Reputation Systems: How to Design One That Does What You Need" written by Chrysanthos Dellarocas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Reputation Crowds facing as an external strategic factors. Some of the topics covered in Online Reputation Systems: How to Design One That Does What You Need case study are - Strategic Management Strategies, Product development, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Online Reputation Systems: How to Design One That Does What You Need casestudy better are - – 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%, increasing commodity prices, increasing household debt because of falling income levels, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing,
talent flight as more people leaving formal jobs, increasing energy prices, etc
Introduction to SWOT Analysis of Online Reputation Systems: How to Design One That Does What You Need
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Online Reputation Systems: How to Design One That Does What You Need case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reputation Crowds, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reputation Crowds 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 Online Reputation Systems: How to Design One That Does What You Need can be done for the following purposes –
1. Strategic planning using facts provided in Online Reputation Systems: How to Design One That Does What You Need case study
2. Improving business portfolio management of Reputation Crowds
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 Reputation Crowds
Strengths Online Reputation Systems: How to Design One That Does What You Need | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reputation Crowds in Online Reputation Systems: How to Design One That Does What You Need Harvard Business Review case study are -
High brand equity
– Reputation Crowds has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Reputation Crowds to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Reputation Crowds in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Sales & Marketing field
– Reputation Crowds 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 Reputation Crowds in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Reputation Crowds is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Reputation Crowds is one of the most innovative firm in sector. Manager in Online Reputation Systems: How to Design One That Does What You Need Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Reputation Crowds 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.
Effective Research and Development (R&D)
– Reputation Crowds 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 Online Reputation Systems: How to Design One That Does What You Need - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Reputation Crowds 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 Reputation Crowds is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Online Reputation Systems: How to Design One That Does What You Need Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Reputation Crowds 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 Chrysanthos Dellarocas 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.
Organizational Resilience of Reputation Crowds
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Reputation Crowds does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Reputation Crowds 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 Online Reputation Systems: How to Design One That Does What You Need HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Reputation Crowds has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Online Reputation Systems: How to Design One That Does What You Need 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.
Weaknesses Online Reputation Systems: How to Design One That Does What You Need | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Online Reputation Systems: How to Design One That Does What You Need are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Online Reputation Systems: How to Design One That Does What You Need, is just above the industry average. Reputation Crowds 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.
Low market penetration in new markets
– Outside its home market of Reputation Crowds, firm in the HBR case study Online Reputation Systems: How to Design One That Does What You Need needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Reputation Crowds 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.
Capital Spending Reduction
– Even during the low interest decade, Reputation Crowds 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.
Need for greater diversity
– Reputation Crowds 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.
Slow to strategic competitive environment developments
– As Online Reputation Systems: How to Design One That Does What You Need HBR case study mentions - Reputation Crowds 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.
Interest costs
– Compare to the competition, Reputation Crowds 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Online Reputation Systems: How to Design One That Does What You Need, it seems that the employees of Reputation Crowds 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.
Increasing silos among functional specialists
– The organizational structure of Reputation Crowds is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Reputation Crowds needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Reputation Crowds to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Reputation Crowds has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Reputation Crowds even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Online Reputation Systems: How to Design One That Does What You Need 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 Reputation Crowds has relatively successful track record of launching new products.
Opportunities Online Reputation Systems: How to Design One That Does What You Need | 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 Online Reputation Systems: How to Design One That Does What You Need are -
Leveraging digital technologies
– Reputation Crowds can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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. Reputation Crowds can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Reputation Crowds can use these opportunities to build new business models that can help the communities that Reputation Crowds operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Reputation Crowds 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, Online Reputation Systems: How to Design One That Does What You Need, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Reputation Crowds 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 Reputation Crowds to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Reputation Crowds 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.
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. Reputation Crowds 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. Reputation Crowds 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.
Manufacturing automation
– Reputation Crowds 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.
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. Reputation Crowds can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Reputation Crowds to increase its market reach. Reputation Crowds 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 Reputation Crowds in the consumer business. Now Reputation Crowds can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Reputation Crowds can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Online Reputation Systems: How to Design One That Does What You Need 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Reputation Crowds 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.
Threats Online Reputation Systems: How to Design One That Does What You Need External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Online Reputation Systems: How to Design One That Does What You Need are -
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 Reputation Crowds in the Sales & Marketing sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Reputation Crowds is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Reputation Crowds 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.
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. Reputation Crowds 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Reputation Crowds 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 Online Reputation Systems: How to Design One That Does What You Need .
Environmental challenges
– Reputation Crowds 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. Reputation Crowds can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Reputation Crowds 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.
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. Reputation Crowds needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Reputation Crowds
– 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 Reputation Crowds.
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 Reputation Crowds.
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 Reputation Crowds 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.
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. Reputation Crowds can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Online Reputation Systems: How to Design One That Does What You Need 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 Online Reputation Systems: How to Design One That Does What You Need 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 Online Reputation Systems: How to Design One That Does What You Need 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 Online Reputation Systems: How to Design One That Does What You Need 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 Online Reputation Systems: How to Design One That Does What You Need 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 Reputation Crowds needs to make to build a sustainable competitive advantage.