BitGold: Turning Digital Currency into Gold? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of BitGold: Turning Digital Currency into Gold?
In April 2015, BitGold, an international savings and payments service, was undergoing the final steps towards its historic initial public offering, which would take place on Canada's TSX Venture Exchange and sought to raise between $10 million to $20 million in funding. With its blending of blockchain technology and aspects of digital currencies like bitcoin, BitGold was paving the way to the legitimation of future "FinTech" startups by going public. The important questions include: How can BitGold continue to maintain its legitimacy and growth on the heels of a tumultuous year for digital currencies, blockchain technology and bitcoin? Given the complexity of the regulatory landscape, how can BitGold build its customer base and expand internationally?
Swot Analysis of "BitGold: Turning Digital Currency into Gold?" written by Jean-Philippe Vergne, Brady Burke includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bitgold Bitcoin facing as an external strategic factors. Some of the topics covered in BitGold: Turning Digital Currency into Gold? case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the BitGold: Turning Digital Currency into Gold? casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing commodity prices,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of BitGold: Turning Digital Currency into Gold?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BitGold: Turning Digital Currency into Gold? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bitgold Bitcoin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bitgold Bitcoin 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 BitGold: Turning Digital Currency into Gold? can be done for the following purposes –
1. Strategic planning using facts provided in BitGold: Turning Digital Currency into Gold? case study
2. Improving business portfolio management of Bitgold Bitcoin
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 Bitgold Bitcoin
Strengths BitGold: Turning Digital Currency into Gold? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bitgold Bitcoin in BitGold: Turning Digital Currency into Gold? Harvard Business Review case study are -
High switching costs
– The high switching costs that Bitgold Bitcoin 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
– BitGold: Turning Digital Currency into Gold? firm has clearly differentiated products in the market place. This has enabled Bitgold Bitcoin to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Bitgold Bitcoin to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Bitgold Bitcoin 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.
Superior customer experience
– The customer experience strategy of Bitgold Bitcoin in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Bitgold Bitcoin is one of the leading recruiters in the industry. Managers in the BitGold: Turning Digital Currency into Gold? 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 Bitgold Bitcoin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bitgold Bitcoin 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.
Strong track record of project management
– Bitgold Bitcoin is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Bitgold Bitcoin
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bitgold Bitcoin does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the BitGold: Turning Digital Currency into Gold? 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
– Bitgold Bitcoin is one of the most innovative firm in sector. Manager in BitGold: Turning Digital Currency into Gold? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Bitgold Bitcoin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bitgold Bitcoin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Bitgold Bitcoin 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 Bitgold Bitcoin in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses BitGold: Turning Digital Currency into Gold? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BitGold: Turning Digital Currency into Gold? are -
Low market penetration in new markets
– Outside its home market of Bitgold Bitcoin, firm in the HBR case study BitGold: Turning Digital Currency into Gold? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study BitGold: Turning Digital Currency into Gold?, 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the BitGold: Turning Digital Currency into Gold? 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 Bitgold Bitcoin has relatively successful track record of launching new products.
High cash cycle compare to competitors
Bitgold Bitcoin 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.
Lack of clear differentiation of Bitgold Bitcoin products
– To increase the profitability and margins on the products, Bitgold Bitcoin needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study BitGold: Turning Digital Currency into Gold?, it seems that the employees of Bitgold Bitcoin 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Jean-Philippe Vergne, Brady Burke suggests that, Bitgold Bitcoin 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.
Aligning sales with marketing
– It come across in the case study BitGold: Turning Digital Currency into Gold? 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 BitGold: Turning Digital Currency into Gold? can leverage the sales team experience to cultivate customer relationships as Bitgold Bitcoin is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BitGold: Turning Digital Currency into Gold?, is just above the industry average. Bitgold Bitcoin 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.
High operating costs
– Compare to the competitors, firm in the HBR case study BitGold: Turning Digital Currency into Gold? 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 Bitgold Bitcoin 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bitgold Bitcoin is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BitGold: Turning Digital Currency into Gold? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities BitGold: Turning Digital Currency into Gold? | 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 BitGold: Turning Digital Currency into Gold? are -
Creating value in data economy
– The success of analytics program of Bitgold Bitcoin has opened avenues for new revenue streams for the organization in the industry. This can help Bitgold Bitcoin to build a more holistic ecosystem as suggested in the BitGold: Turning Digital Currency into Gold? case study. Bitgold Bitcoin can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bitgold Bitcoin is facing challenges because of the dominance of functional experts in the organization. BitGold: Turning Digital Currency into Gold? 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.
Loyalty marketing
– Bitgold Bitcoin has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bitgold Bitcoin 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. Bitgold Bitcoin 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.
Leveraging digital technologies
– Bitgold Bitcoin 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.
Buying journey improvements
– Bitgold Bitcoin can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. BitGold: Turning Digital Currency into Gold? 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.
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 Bitgold Bitcoin 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.
Manufacturing automation
– Bitgold Bitcoin 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.
Building a culture of innovation
– managers at Bitgold Bitcoin 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.
Better consumer reach
– The expansion of the 5G network will help Bitgold Bitcoin to increase its market reach. Bitgold Bitcoin 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bitgold Bitcoin 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 Bitgold Bitcoin to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bitgold Bitcoin can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, BitGold: Turning Digital Currency into Gold?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Bitgold Bitcoin 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.
Threats BitGold: Turning Digital Currency into Gold? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BitGold: Turning Digital Currency into Gold? are -
Environmental challenges
– Bitgold Bitcoin 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. Bitgold Bitcoin can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bitgold Bitcoin 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 BitGold: Turning Digital Currency into Gold? .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bitgold Bitcoin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Bitgold Bitcoin.
Shortening product life cycle
– it is one of the major threat that Bitgold Bitcoin is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Bitgold Bitcoin 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.
Technology acceleration in Forth Industrial Revolution
– Bitgold Bitcoin has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Bitgold Bitcoin 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. Bitgold Bitcoin 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.
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 Bitgold Bitcoin in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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 Bitgold Bitcoin business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Bitgold Bitcoin
– 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 Bitgold Bitcoin.
Stagnating economy with rate increase
– Bitgold Bitcoin 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.
Weighted SWOT Analysis of BitGold: Turning Digital Currency into Gold? 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 BitGold: Turning Digital Currency into Gold? 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 BitGold: Turning Digital Currency into Gold? 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 BitGold: Turning Digital Currency into Gold? 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 BitGold: Turning Digital Currency into Gold? 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 Bitgold Bitcoin needs to make to build a sustainable competitive advantage.
