iStockphoto.com: Turning Community into Commerce SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of iStockphoto.com: Turning Community into Commerce
When the founder of iStockphoto.com started the company in 2000, his objective was to share his vast collection of stock photography with graphic designers worldwide, and, in the process, help others do the same. By 2002, the organization was a respected and successful online community, but the founder and his partners now had to consider the profitability of their company. iStock was founded on community and collaboration - not commerce. Should the model change and if so, what would it take to make a significant culture change work? The case examines the culture and business opportunities for this start-up. It demonstrates the challenges of generating profit from an online community, as well as the key factors needed to build a community that can be turned into a profitable business.
Swot Analysis of "iStockphoto.com: Turning Community into Commerce" written by Rebecca A. Grant, Meghan Stothers includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Istockphoto.com Community facing as an external strategic factors. Some of the topics covered in iStockphoto.com: Turning Community into Commerce case study are - Strategic Management Strategies, Change management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the iStockphoto.com: Turning Community into Commerce casestudy better are - – challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, geopolitical disruptions, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, there is increasing trade war between United States & China,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of iStockphoto.com: Turning Community into Commerce
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in iStockphoto.com: Turning Community into Commerce case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Istockphoto.com Community, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Istockphoto.com Community 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 iStockphoto.com: Turning Community into Commerce can be done for the following purposes –
1. Strategic planning using facts provided in iStockphoto.com: Turning Community into Commerce case study
2. Improving business portfolio management of Istockphoto.com Community
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 Istockphoto.com Community
Strengths iStockphoto.com: Turning Community into Commerce | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Istockphoto.com Community in iStockphoto.com: Turning Community into Commerce Harvard Business Review case study are -
Highly skilled collaborators
– Istockphoto.com Community 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 iStockphoto.com: Turning Community into Commerce HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Istockphoto.com Community is one of the most innovative firm in sector. Manager in iStockphoto.com: Turning Community into Commerce Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the iStockphoto.com: Turning Community into Commerce 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.
Training and development
– Istockphoto.com Community has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in iStockphoto.com: Turning Community into Commerce 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.
Ability to lead change in Strategy & Execution field
– Istockphoto.com Community 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 Istockphoto.com Community in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Istockphoto.com Community
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Istockphoto.com Community 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
– Istockphoto.com Community has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Istockphoto.com Community 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.
Learning organization
- Istockphoto.com Community 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 Istockphoto.com Community is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in iStockphoto.com: Turning Community into Commerce Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Istockphoto.com Community 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
– Istockphoto.com Community 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 Rebecca A. Grant, Meghan Stothers 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.
High switching costs
– The high switching costs that Istockphoto.com Community 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.
Superior customer experience
– The customer experience strategy of Istockphoto.com Community in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses iStockphoto.com: Turning Community into Commerce | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of iStockphoto.com: Turning Community into Commerce are -
Workers concerns about automation
– As automation is fast increasing in the segment, Istockphoto.com Community 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 bargaining power of channel partners
– Because of the regulatory requirements, Rebecca A. Grant, Meghan Stothers suggests that, Istockphoto.com Community 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Istockphoto.com Community is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study iStockphoto.com: Turning Community into Commerce can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Istockphoto.com Community 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 iStockphoto.com: Turning Community into Commerce HBR case study mentions - Istockphoto.com Community 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the iStockphoto.com: Turning Community into Commerce 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 Istockphoto.com Community has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Istockphoto.com Community 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. Istockphoto.com Community 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.
Interest costs
– Compare to the competition, Istockphoto.com Community 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.
High operating costs
– Compare to the competitors, firm in the HBR case study iStockphoto.com: Turning Community into Commerce 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 Istockphoto.com Community 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Istockphoto.com Community, firm in the HBR case study iStockphoto.com: Turning Community into Commerce needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study iStockphoto.com: Turning Community into Commerce 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 iStockphoto.com: Turning Community into Commerce can leverage the sales team experience to cultivate customer relationships as Istockphoto.com Community is planning to shift buying processes online.
Opportunities iStockphoto.com: Turning Community into Commerce | 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 iStockphoto.com: Turning Community into Commerce are -
Loyalty marketing
– Istockphoto.com Community 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Istockphoto.com Community 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 Istockphoto.com Community to hire the very best people irrespective of their geographical location.
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. Istockphoto.com Community can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Istockphoto.com Community 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Istockphoto.com Community can use these opportunities to build new business models that can help the communities that Istockphoto.com Community operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– Istockphoto.com Community can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. iStockphoto.com: Turning Community into Commerce 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.
Manufacturing automation
– Istockphoto.com Community 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
– Istockphoto.com Community 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 iStockphoto.com: Turning Community into Commerce - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Istockphoto.com Community to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Istockphoto.com Community 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Istockphoto.com Community can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Istockphoto.com Community 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.
Better consumer reach
– The expansion of the 5G network will help Istockphoto.com Community to increase its market reach. Istockphoto.com Community 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 Istockphoto.com Community in the consumer business. Now Istockphoto.com Community can target international markets with far fewer capital restrictions requirements than the existing system.
Threats iStockphoto.com: Turning Community into Commerce External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study iStockphoto.com: Turning Community into Commerce are -
Technology acceleration in Forth Industrial Revolution
– Istockphoto.com Community has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Istockphoto.com Community needs to keep up with the evolution of technology in the Strategy & Execution 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.
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. Istockphoto.com Community 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Istockphoto.com Community can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Istockphoto.com Community business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Istockphoto.com Community 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.
Stagnating economy with rate increase
– Istockphoto.com Community 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.
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.
Shortening product life cycle
– it is one of the major threat that Istockphoto.com Community 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. Istockphoto.com Community needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Istockphoto.com Community 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.
Environmental challenges
– Istockphoto.com Community 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. Istockphoto.com Community can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study iStockphoto.com: Turning Community into Commerce, Istockphoto.com Community 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 .
High dependence on third party suppliers
– Istockphoto.com Community 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.
Weighted SWOT Analysis of iStockphoto.com: Turning Community into Commerce 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 iStockphoto.com: Turning Community into Commerce 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 iStockphoto.com: Turning Community into Commerce 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 iStockphoto.com: Turning Community into Commerce 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 iStockphoto.com: Turning Community into Commerce 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 Istockphoto.com Community needs to make to build a sustainable competitive advantage.