Case Study Description of SmartOps Corporation: Forging Smart Alliances?
After creating a market for his "new to the world" product and a significant partnership with the German-based SAP AG (SAP), Sridhar Tayur had an opportunity to take the partnership with SAP to another level by establishing a reseller arrangement, available to only a dozen or so of SAP's elite partners out of more than 600-widely considered in the enterprise software industry as a dream come true for technology entrepreneurs. Suitable for use in MBA, EMBA, and GEMBA programs, this case offers the opportunity to focus decision making on several key marketing and sales issues. Should Tayur sign a deal with SAP, thereby handing significant control of the messaging and positioning of SmartOps to a global giant? How reliant on SAP did he really want to get? Would signing the deal make losing control of his company more likely and alienate prospects who were not fans of SAP? What would not doing the deal mean for the relationship with SAP? Would SAP go down the reseller route with a competitor? What exactly was a good reseller contract, and was it possible for a company as small as SmartOps to make the agreement a win-win?
Swot Analysis of "SmartOps Corporation: Forging Smart Alliances?" written by Ronald T Wilcox, Gerry Yemen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sap Smartops facing as an external strategic factors. Some of the topics covered in SmartOps Corporation: Forging Smart Alliances? case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Joint ventures, Manufacturing, Marketing, Pricing, Supply chain, Technology and Sales & Marketing.
Some of the macro environment factors that can be used to understand the SmartOps Corporation: Forging Smart Alliances? casestudy better are - – increasing household debt because of falling income levels, technology disruption, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, there is increasing trade war between United States & China, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, etc
Introduction to SWOT Analysis of SmartOps Corporation: Forging Smart Alliances?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SmartOps Corporation: Forging Smart Alliances? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sap Smartops, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sap Smartops 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 SmartOps Corporation: Forging Smart Alliances? can be done for the following purposes –
1. Strategic planning using facts provided in SmartOps Corporation: Forging Smart Alliances? case study
2. Improving business portfolio management of Sap Smartops
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 Sap Smartops
Strengths SmartOps Corporation: Forging Smart Alliances? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sap Smartops in SmartOps Corporation: Forging Smart Alliances? Harvard Business Review case study are -
Organizational Resilience of Sap Smartops
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sap Smartops does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Sap Smartops 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 Ronald T Wilcox, Gerry Yemen 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.
Learning organization
- Sap Smartops 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 Sap Smartops is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SmartOps Corporation: Forging Smart Alliances? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Sap Smartops has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in SmartOps Corporation: Forging Smart Alliances? 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Sap Smartops digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sap Smartops 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.
Ability to lead change in Sales & Marketing field
– Sap Smartops 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 Sap Smartops in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Sap Smartops is one of the most innovative firm in sector. Manager in SmartOps Corporation: Forging Smart Alliances? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Sap Smartops has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sap Smartops 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.
Operational resilience
– The operational resilience strategy in the SmartOps Corporation: Forging Smart Alliances? 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.
High switching costs
– The high switching costs that Sap Smartops 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.
Low bargaining power of suppliers
– Suppliers of Sap Smartops in the sector have low bargaining power. SmartOps Corporation: Forging Smart Alliances? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sap Smartops to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Sales & Marketing industry
– SmartOps Corporation: Forging Smart Alliances? firm has clearly differentiated products in the market place. This has enabled Sap Smartops to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Sap Smartops to invest into research and development (R&D) and innovation.
Weaknesses SmartOps Corporation: Forging Smart Alliances? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SmartOps Corporation: Forging Smart Alliances? are -
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 Sap Smartops supply chain. Even after few cautionary changes mentioned in the HBR case study - SmartOps Corporation: Forging Smart Alliances?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sap Smartops vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sap Smartops is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study SmartOps Corporation: Forging Smart Alliances? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study SmartOps Corporation: Forging Smart Alliances?, is just above the industry average. Sap Smartops 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.
Slow decision making process
– As mentioned earlier in the report, Sap Smartops 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. Sap Smartops 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.
Low market penetration in new markets
– Outside its home market of Sap Smartops, firm in the HBR case study SmartOps Corporation: Forging Smart Alliances? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study SmartOps Corporation: Forging Smart Alliances?, 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.
Skills based hiring
– The stress on hiring functional specialists at Sap Smartops 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.
Interest costs
– Compare to the competition, Sap Smartops 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study SmartOps Corporation: Forging Smart Alliances?, in the dynamic environment Sap Smartops has struggled to respond to the nimble upstart competition. Sap Smartops has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As SmartOps Corporation: Forging Smart Alliances? HBR case study mentions - Sap Smartops 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ronald T Wilcox, Gerry Yemen suggests that, Sap Smartops 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.
Opportunities SmartOps Corporation: Forging Smart Alliances? | 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 SmartOps Corporation: Forging Smart Alliances? are -
Creating value in data economy
– The success of analytics program of Sap Smartops has opened avenues for new revenue streams for the organization in the industry. This can help Sap Smartops to build a more holistic ecosystem as suggested in the SmartOps Corporation: Forging Smart Alliances? case study. Sap Smartops can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sap Smartops 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.
Learning at scale
– Online learning technologies has now opened space for Sap Smartops 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sap Smartops 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 Sap Smartops to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sap Smartops 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.
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. Sap Smartops 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, Sap Smartops can use these opportunities to build new business models that can help the communities that Sap Smartops operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sap Smartops can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Sap Smartops in the consumer business. Now Sap Smartops can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Sap Smartops can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. SmartOps Corporation: Forging Smart Alliances? 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
– Sap Smartops 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.
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 Sap Smartops 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.
Loyalty marketing
– Sap Smartops 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.
Threats SmartOps Corporation: Forging Smart Alliances? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SmartOps Corporation: Forging Smart Alliances? 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 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sap Smartops with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Sap Smartops is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sap Smartops 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 SmartOps Corporation: Forging Smart Alliances? .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SmartOps Corporation: Forging Smart Alliances?, Sap Smartops 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
– Sap Smartops 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. Sap Smartops can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Sap Smartops 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.
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 Sap Smartops in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Sap Smartops has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Sap Smartops 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 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. Sap Smartops needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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. Sap Smartops can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Sap Smartops 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.
Weighted SWOT Analysis of SmartOps Corporation: Forging Smart Alliances? 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 SmartOps Corporation: Forging Smart Alliances? 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 SmartOps Corporation: Forging Smart Alliances? 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 SmartOps Corporation: Forging Smart Alliances? 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 SmartOps Corporation: Forging Smart Alliances? 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 Sap Smartops needs to make to build a sustainable competitive advantage.