AOL Latin America and Cisneros Group: A Success Story? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of AOL Latin America and Cisneros Group: A Success Story?
The case describes AOL Latin America, a joint venture with Venezuela's Cisneros Group. It highlights the challenges faced by AOL, a leading brand, into entering emerging markets. AOL was a latecomer in Latin American Internet and had a difficult debut in Brazil after a challenging Initial Public Offering.
Swot Analysis of "AOL Latin America and Cisneros Group: A Success Story?" written by Lourdes Casanova, Olivares Marcello, Paulina Cuadra, Gonzalo Jimenez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aol Cisneros facing as an external strategic factors. Some of the topics covered in AOL Latin America and Cisneros Group: A Success Story? case study are - Strategic Management Strategies, Internet, Joint ventures and Strategy & Execution.
Some of the macro environment factors that can be used to understand the AOL Latin America and Cisneros Group: A Success Story? casestudy better are - – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, there is backlash against globalization, there is increasing trade war between United States & China, wage bills are increasing, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of AOL Latin America and Cisneros Group: A Success Story?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AOL Latin America and Cisneros Group: A Success Story? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aol Cisneros, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aol Cisneros 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 AOL Latin America and Cisneros Group: A Success Story? can be done for the following purposes –
1. Strategic planning using facts provided in AOL Latin America and Cisneros Group: A Success Story? case study
2. Improving business portfolio management of Aol Cisneros
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aol Cisneros
Strengths AOL Latin America and Cisneros Group: A Success Story? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aol Cisneros in AOL Latin America and Cisneros Group: A Success Story? Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– AOL Latin America and Cisneros Group: A Success Story? firm has clearly differentiated products in the market place. This has enabled Aol Cisneros to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Aol Cisneros to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Aol Cisneros is present in almost all the verticals within the industry. This has provided firm in AOL Latin America and Cisneros Group: A Success Story? 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.
Training and development
– Aol Cisneros has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AOL Latin America and Cisneros Group: A Success Story? 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.
Strong track record of project management
– Aol Cisneros is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Aol Cisneros 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 Lourdes Casanova, Olivares Marcello, Paulina Cuadra, Gonzalo Jimenez 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.
Ability to recruit top talent
– Aol Cisneros is one of the leading recruiters in the industry. Managers in the AOL Latin America and Cisneros Group: A Success Story? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Aol Cisneros digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aol Cisneros 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.
Organizational Resilience of Aol Cisneros
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aol Cisneros does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Aol Cisneros has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aol Cisneros 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.
Innovation driven organization
– Aol Cisneros is one of the most innovative firm in sector. Manager in AOL Latin America and Cisneros Group: A Success Story? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Aol Cisneros 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 AOL Latin America and Cisneros Group: A Success Story? - 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 Aol Cisneros are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses AOL Latin America and Cisneros Group: A Success Story? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AOL Latin America and Cisneros Group: A Success Story? 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 Aol Cisneros supply chain. Even after few cautionary changes mentioned in the HBR case study - AOL Latin America and Cisneros Group: A Success Story?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aol Cisneros vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study AOL Latin America and Cisneros Group: A Success Story? 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 Aol Cisneros 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Aol Cisneros 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AOL Latin America and Cisneros Group: A Success Story? 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 Aol Cisneros has relatively successful track record of launching new products.
High cash cycle compare to competitors
Aol Cisneros has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Aol Cisneros is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Aol Cisneros needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aol Cisneros to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aol Cisneros is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AOL Latin America and Cisneros Group: A Success Story? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AOL Latin America and Cisneros Group: A Success Story?, it seems that the employees of Aol Cisneros 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.
Capital Spending Reduction
– Even during the low interest decade, Aol Cisneros 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.
Skills based hiring
– The stress on hiring functional specialists at Aol Cisneros 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.
Aligning sales with marketing
– It come across in the case study AOL Latin America and Cisneros Group: A Success Story? 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 AOL Latin America and Cisneros Group: A Success Story? can leverage the sales team experience to cultivate customer relationships as Aol Cisneros is planning to shift buying processes online.
Opportunities AOL Latin America and Cisneros Group: A Success Story? | 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 AOL Latin America and Cisneros Group: A Success Story? are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aol Cisneros 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. Aol Cisneros 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aol Cisneros is facing challenges because of the dominance of functional experts in the organization. AOL Latin America and Cisneros Group: A Success Story? 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.
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 Aol Cisneros 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.
Developing new processes and practices
– Aol Cisneros can develop new processes and procedures in Strategy & Execution 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aol Cisneros can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Aol Cisneros 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 Strategy & Execution segment.
Learning at scale
– Online learning technologies has now opened space for Aol Cisneros 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 Aol Cisneros 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 Aol Cisneros to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Aol Cisneros can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AOL Latin America and Cisneros Group: A Success Story? 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aol Cisneros in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aol Cisneros 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.
Manufacturing automation
– Aol Cisneros can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Using analytics as competitive advantage
– Aol Cisneros 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 AOL Latin America and Cisneros Group: A Success Story? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aol Cisneros to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats AOL Latin America and Cisneros Group: A Success Story? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AOL Latin America and Cisneros Group: A Success Story? are -
Shortening product life cycle
– it is one of the major threat that Aol Cisneros is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Aol Cisneros needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Aol Cisneros 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. Aol Cisneros can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aol Cisneros with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Aol Cisneros business can come under increasing regulations regarding data privacy, data security, etc.
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.
High dependence on third party suppliers
– Aol Cisneros 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.
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 Aol Cisneros.
Regulatory challenges
– Aol Cisneros 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 Strategy & Execution 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 Aol Cisneros in the Strategy & Execution sector and impact the bottomline 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 AOL Latin America and Cisneros Group: A Success Story?, Aol Cisneros may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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. Aol Cisneros will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of AOL Latin America and Cisneros Group: A Success Story? 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 AOL Latin America and Cisneros Group: A Success Story? 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 AOL Latin America and Cisneros Group: A Success Story? 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 AOL Latin America and Cisneros Group: A Success Story? 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 AOL Latin America and Cisneros Group: A Success Story? 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 Aol Cisneros needs to make to build a sustainable competitive advantage.