Case Study Description of Disintermediation in Two-Sided Marketplaces
Two-sided marketplaces often risk disintermediation: Users may rely on the marketplace to find each other, but then perform related future transactions--or even the current transaction--without the platform's involvement and without paying any fees the platform may charge. This technical note assesses which marketplaces are most vulnerable to disintermediation, and offers a set of strategies marketplaces can implement in order to reduce their vulnerability.
Swot Analysis of "Disintermediation in Two-Sided Marketplaces" written by Benjamin Edelman, Philip Hu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Marketplaces Disintermediation facing as an external strategic factors. Some of the topics covered in Disintermediation in Two-Sided Marketplaces case study are - Strategic Management Strategies, Economics, Internet, IT, Marketing, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Disintermediation in Two-Sided Marketplaces casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, there is backlash against globalization, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
technology disruption, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Disintermediation in Two-Sided Marketplaces
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Disintermediation in Two-Sided Marketplaces case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Marketplaces Disintermediation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Marketplaces Disintermediation 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 Disintermediation in Two-Sided Marketplaces can be done for the following purposes –
1. Strategic planning using facts provided in Disintermediation in Two-Sided Marketplaces case study
2. Improving business portfolio management of Marketplaces Disintermediation
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 Marketplaces Disintermediation
Strengths Disintermediation in Two-Sided Marketplaces | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Marketplaces Disintermediation in Disintermediation in Two-Sided Marketplaces Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Marketplaces Disintermediation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Marketplaces Disintermediation 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.
Diverse revenue streams
– Marketplaces Disintermediation is present in almost all the verticals within the industry. This has provided firm in Disintermediation in Two-Sided Marketplaces 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.
Superior customer experience
– The customer experience strategy of Marketplaces Disintermediation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Marketplaces Disintermediation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Marketplaces Disintermediation 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.
Low bargaining power of suppliers
– Suppliers of Marketplaces Disintermediation in the sector have low bargaining power. Disintermediation in Two-Sided Marketplaces has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Marketplaces Disintermediation to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Disintermediation in Two-Sided Marketplaces 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.
Organizational Resilience of Marketplaces Disintermediation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Marketplaces Disintermediation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Marketplaces Disintermediation 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.
Effective Research and Development (R&D)
– Marketplaces Disintermediation 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 Disintermediation in Two-Sided Marketplaces - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Marketplaces Disintermediation 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 Benjamin Edelman, Philip Hu 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.
Training and development
– Marketplaces Disintermediation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Disintermediation in Two-Sided Marketplaces 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
– Marketplaces Disintermediation 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 Marketplaces Disintermediation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Disintermediation in Two-Sided Marketplaces | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Disintermediation in Two-Sided Marketplaces are -
High cash cycle compare to competitors
Marketplaces Disintermediation 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Marketplaces Disintermediation 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Marketplaces Disintermediation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Disintermediation in Two-Sided Marketplaces can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Marketplaces Disintermediation 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 - Disintermediation in Two-Sided Marketplaces should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Marketplaces Disintermediation products
– To increase the profitability and margins on the products, Marketplaces Disintermediation needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Disintermediation in Two-Sided Marketplaces 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 Marketplaces Disintermediation 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Disintermediation in Two-Sided Marketplaces, is just above the industry average. Marketplaces Disintermediation 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.
Need for greater diversity
– Marketplaces Disintermediation 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.
Capital Spending Reduction
– Even during the low interest decade, Marketplaces Disintermediation 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.
Increasing silos among functional specialists
– The organizational structure of Marketplaces Disintermediation is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Marketplaces Disintermediation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Marketplaces Disintermediation to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Disintermediation in Two-Sided Marketplaces 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 Marketplaces Disintermediation has relatively successful track record of launching new products.
Opportunities Disintermediation in Two-Sided Marketplaces | 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 Disintermediation in Two-Sided Marketplaces are -
Learning at scale
– Online learning technologies has now opened space for Marketplaces Disintermediation 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Marketplaces Disintermediation 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.
Using analytics as competitive advantage
– Marketplaces Disintermediation 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 Disintermediation in Two-Sided Marketplaces - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Marketplaces Disintermediation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Marketplaces Disintermediation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Marketplaces Disintermediation to increase its market reach. Marketplaces Disintermediation 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.
Building a culture of innovation
– managers at Marketplaces Disintermediation 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.
Buying journey improvements
– Marketplaces Disintermediation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Disintermediation in Two-Sided Marketplaces 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.
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 Marketplaces Disintermediation in the consumer business. Now Marketplaces Disintermediation can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Marketplaces Disintermediation is facing challenges because of the dominance of functional experts in the organization. Disintermediation in Two-Sided Marketplaces 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.
Developing new processes and practices
– Marketplaces Disintermediation 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.
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 Marketplaces Disintermediation 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.
Creating value in data economy
– The success of analytics program of Marketplaces Disintermediation has opened avenues for new revenue streams for the organization in the industry. This can help Marketplaces Disintermediation to build a more holistic ecosystem as suggested in the Disintermediation in Two-Sided Marketplaces case study. Marketplaces Disintermediation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Marketplaces Disintermediation 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.
Threats Disintermediation in Two-Sided Marketplaces External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Disintermediation in Two-Sided Marketplaces are -
Stagnating economy with rate increase
– Marketplaces Disintermediation 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.
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 Marketplaces Disintermediation in the Strategy & Execution sector and impact the bottomline of the organization.
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. Marketplaces Disintermediation needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Marketplaces Disintermediation is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Marketplaces Disintermediation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Marketplaces Disintermediation business can come under increasing regulations regarding data privacy, data security, etc.
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 Marketplaces Disintermediation.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Disintermediation in Two-Sided Marketplaces, Marketplaces Disintermediation 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Marketplaces Disintermediation 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 Disintermediation in Two-Sided Marketplaces .
Increasing wage structure of Marketplaces Disintermediation
– 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 Marketplaces Disintermediation.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Marketplaces Disintermediation 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.
Regulatory challenges
– Marketplaces Disintermediation 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.
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. Marketplaces Disintermediation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Disintermediation in Two-Sided Marketplaces 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 Disintermediation in Two-Sided Marketplaces 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 Disintermediation in Two-Sided Marketplaces 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 Disintermediation in Two-Sided Marketplaces 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 Disintermediation in Two-Sided Marketplaces 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 Marketplaces Disintermediation needs to make to build a sustainable competitive advantage.
