Case Study Description of Guest-Tek Interactive Entertainment: International Sales
The chief executive officer of Calgary-based Guest-Tek Interactive Entertainment Ltd., a leading provider of high-speed Internet access to the hotel industry, must consider whether and how his company should grow its business overseas. Ninety-seven percent of Guest-Tek's fiscal year 2003 revenue was derived from North American hotels--a market he knew would eventually become saturated. Guest-Tek had listed publicly in January 2004. Both internal and external investors now demanded results. Other geographic markets held the promise of new growth and competitors were already pursuing those opportunities.
Swot Analysis of "Guest-Tek Interactive Entertainment: International Sales" written by Laurie Milton, Nigel Goodwin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tek Guest facing as an external strategic factors. Some of the topics covered in Guest-Tek Interactive Entertainment: International Sales case study are - Strategic Management Strategies, Globalization, Internet, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Guest-Tek Interactive Entertainment: International Sales casestudy better are - – digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing energy prices, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, geopolitical disruptions,
increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Guest-Tek Interactive Entertainment: International Sales
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Guest-Tek Interactive Entertainment: International Sales case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tek Guest, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tek Guest 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 Guest-Tek Interactive Entertainment: International Sales can be done for the following purposes –
1. Strategic planning using facts provided in Guest-Tek Interactive Entertainment: International Sales case study
2. Improving business portfolio management of Tek Guest
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 Tek Guest
Strengths Guest-Tek Interactive Entertainment: International Sales | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tek Guest in Guest-Tek Interactive Entertainment: International Sales Harvard Business Review case study are -
Highly skilled collaborators
– Tek Guest 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 Guest-Tek Interactive Entertainment: International Sales HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Tek Guest has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tek Guest has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Tek Guest in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Tek Guest in the sector have low bargaining power. Guest-Tek Interactive Entertainment: International Sales has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tek Guest to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Tek Guest 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 Guest-Tek Interactive Entertainment: International Sales - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Tek Guest 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 Tek Guest in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Tek Guest digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tek Guest 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.
High switching costs
– The high switching costs that Tek Guest 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Guest-Tek Interactive Entertainment: International Sales firm has clearly differentiated products in the market place. This has enabled Tek Guest to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tek Guest to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Guest-Tek Interactive Entertainment: International Sales 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.
Innovation driven organization
– Tek Guest is one of the most innovative firm in sector. Manager in Guest-Tek Interactive Entertainment: International Sales Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Tek Guest has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Guest-Tek Interactive Entertainment: International Sales 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 Guest-Tek Interactive Entertainment: International Sales | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guest-Tek Interactive Entertainment: International Sales are -
High cash cycle compare to competitors
Tek Guest 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.
Aligning sales with marketing
– It come across in the case study Guest-Tek Interactive Entertainment: International Sales 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 Guest-Tek Interactive Entertainment: International Sales can leverage the sales team experience to cultivate customer relationships as Tek Guest is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Guest-Tek Interactive Entertainment: International Sales 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 Tek Guest has relatively successful track record of launching new products.
Lack of clear differentiation of Tek Guest products
– To increase the profitability and margins on the products, Tek Guest needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Guest-Tek Interactive Entertainment: International Sales, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Laurie Milton, Nigel Goodwin suggests that, Tek Guest is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Increasing silos among functional specialists
– The organizational structure of Tek Guest is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Tek Guest needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tek Guest to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Guest-Tek Interactive Entertainment: International Sales, is just above the industry average. Tek Guest 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Guest-Tek Interactive Entertainment: International Sales, in the dynamic environment Tek Guest has struggled to respond to the nimble upstart competition. Tek Guest has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Tek Guest 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.
Products dominated business model
– Even though Tek Guest has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Guest-Tek Interactive Entertainment: International Sales should strive to include more intangible value offerings along with its core products and services.
Opportunities Guest-Tek Interactive Entertainment: International Sales | 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 Guest-Tek Interactive Entertainment: International Sales are -
Learning at scale
– Online learning technologies has now opened space for Tek Guest 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tek Guest can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tek Guest 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.
Buying journey improvements
– Tek Guest can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Guest-Tek Interactive Entertainment: International Sales 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.
Creating value in data economy
– The success of analytics program of Tek Guest has opened avenues for new revenue streams for the organization in the industry. This can help Tek Guest to build a more holistic ecosystem as suggested in the Guest-Tek Interactive Entertainment: International Sales case study. Tek Guest can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Tek Guest in the consumer business. Now Tek Guest can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Tek Guest 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.
Building a culture of innovation
– managers at Tek Guest 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.
Manufacturing automation
– Tek Guest 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tek Guest can use these opportunities to build new business models that can help the communities that Tek Guest operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Tek Guest can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Tek Guest 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.
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. Tek Guest 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. Tek Guest 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.
Threats Guest-Tek Interactive Entertainment: International Sales External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Guest-Tek Interactive Entertainment: International Sales are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tek Guest 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 Guest-Tek Interactive Entertainment: International Sales .
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 Tek Guest business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tek Guest in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Guest-Tek Interactive Entertainment: International Sales, Tek Guest 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 .
Consumer confidence and its impact on Tek Guest 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.
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 Tek Guest in the Strategy & Execution sector and impact the bottomline of the organization.
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. Tek Guest can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tek Guest with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Tek Guest 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. Tek Guest can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Tek Guest
– 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 Tek Guest.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Tek Guest has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Tek Guest 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.
Weighted SWOT Analysis of Guest-Tek Interactive Entertainment: International Sales 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 Guest-Tek Interactive Entertainment: International Sales 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 Guest-Tek Interactive Entertainment: International Sales 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 Guest-Tek Interactive Entertainment: International Sales 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 Guest-Tek Interactive Entertainment: International Sales 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 Tek Guest needs to make to build a sustainable competitive advantage.