Pactera's Expansion in the United States SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Pactera's Expansion in the United States
In 2012, Pactera, a China-headquartered IT service firm, went public on the NASDAQ. In 2014, it was taken private by a consortium led by the U.S.-based global investment and advisory firm Blackstone. This accelerated the firm's expansion in the U.S. market and its plans to move up the value chain. Pactera's executive vice-president must formulate and implement the right strategy in order to continue its success in the U.S. market, gain access to cutting-edge technology and talent, and better compete against sophisticated American and Indian rivals. Failure to apply the correct strategy to its operations in the U.S. market could restrict its growth and negatively impact its performance in the global market. Dezhi Chen is affiliated with Shanghai Jiao Tong University. Xiaohua Yang is affiliated with University of San Francisco. William Wei is affiliated with MacEwan University.
Authors :: Dezhi Chen, Yang Xiaohua, William Wei, Tingting Guo
Swot Analysis of "Pactera's Expansion in the United States" written by Dezhi Chen, Yang Xiaohua, William Wei, Tingting Guo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pactera's U.s facing as an external strategic factors. Some of the topics covered in Pactera's Expansion in the United States case study are - Strategic Management Strategies, Globalization, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Pactera's Expansion in the United States casestudy better are - – supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
challanges to central banks by blockchain based private currencies, geopolitical disruptions, etc
Introduction to SWOT Analysis of Pactera's Expansion in the United States
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pactera's Expansion in the United States case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pactera's U.s, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pactera's U.s 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 Pactera's Expansion in the United States can be done for the following purposes –
1. Strategic planning using facts provided in Pactera's Expansion in the United States case study
2. Improving business portfolio management of Pactera's U.s
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 Pactera's U.s
Strengths Pactera's Expansion in the United States | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pactera's U.s in Pactera's Expansion in the United States Harvard Business Review case study are -
Ability to recruit top talent
– Pactera's U.s is one of the leading recruiters in the industry. Managers in the Pactera's Expansion in the United States are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Pactera's U.s 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 Dezhi Chen, Yang Xiaohua, William Wei, Tingting Guo 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.
Strong track record of project management
– Pactera's U.s is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Pactera's U.s has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pactera's U.s to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Pactera's U.s in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Strategy & Execution industry
– Pactera's Expansion in the United States firm has clearly differentiated products in the market place. This has enabled Pactera's U.s to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Pactera's U.s to invest into research and development (R&D) and innovation.
Learning organization
- Pactera's U.s 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 Pactera's U.s is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pactera's Expansion in the United States Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Pactera's U.s 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 Pactera's Expansion in the United States HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Pactera's U.s is present in almost all the verticals within the industry. This has provided firm in Pactera's Expansion in the United States 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.
Low bargaining power of suppliers
– Suppliers of Pactera's U.s in the sector have low bargaining power. Pactera's Expansion in the United States has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pactera's U.s to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Pactera's U.s has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pactera's U.s has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Innovation driven organization
– Pactera's U.s is one of the most innovative firm in sector. Manager in Pactera's Expansion in the United States Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Pactera's Expansion in the United States | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pactera's Expansion in the United States are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Pactera's Expansion in the United States 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 Pactera's U.s has relatively successful track record of launching new products.
Lack of clear differentiation of Pactera's U.s products
– To increase the profitability and margins on the products, Pactera's U.s needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Pactera's Expansion in the United States HBR case study mentions - Pactera's U.s 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Pactera's Expansion in the United States, is just above the industry average. Pactera's U.s 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 cash cycle compare to competitors
Pactera's U.s 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pactera's U.s is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Pactera's Expansion in the United States 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 Pactera's U.s 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 - Pactera's Expansion in the United States should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Dezhi Chen, Yang Xiaohua, William Wei, Tingting Guo suggests that, Pactera's U.s 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 Pactera's Expansion in the United States 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 Pactera's Expansion in the United States can leverage the sales team experience to cultivate customer relationships as Pactera's U.s is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Pactera's Expansion in the United States, in the dynamic environment Pactera's U.s has struggled to respond to the nimble upstart competition. Pactera's U.s has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Pactera's U.s 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.
Opportunities Pactera's Expansion in the United States | 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 Pactera's Expansion in the United States are -
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. Pactera's U.s can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Pactera's U.s 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 Pactera's U.s can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pactera's U.s 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, Pactera's Expansion in the United States, 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
– Pactera's U.s 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pactera's U.s is facing challenges because of the dominance of functional experts in the organization. Pactera's Expansion in the United States 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.
Manufacturing automation
– Pactera's U.s 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, Pactera's U.s can use these opportunities to build new business models that can help the communities that Pactera's U.s operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Pactera's U.s has opened avenues for new revenue streams for the organization in the industry. This can help Pactera's U.s to build a more holistic ecosystem as suggested in the Pactera's Expansion in the United States case study. Pactera's U.s can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Pactera's U.s 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.
Building a culture of innovation
– managers at Pactera's U.s 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.
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 Pactera's U.s 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pactera's U.s 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.
Threats Pactera's Expansion in the United States External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pactera's Expansion in the United States are -
Consumer confidence and its impact on Pactera's U.s 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.
Shortening product life cycle
– it is one of the major threat that Pactera's U.s is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pactera's U.s 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 Pactera's Expansion in the United States .
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 Pactera's U.s 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. Pactera's U.s can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Pactera's U.s 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pactera's U.s 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.
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. Pactera's U.s 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.
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 Pactera's U.s.
Environmental challenges
– Pactera's U.s 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. Pactera's U.s can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Pactera's U.s
– 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 Pactera's U.s.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Pactera's Expansion in the United States, Pactera's U.s 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pactera's U.s with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Pactera's Expansion in the United States 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 Pactera's Expansion in the United States 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 Pactera's Expansion in the United States 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 Pactera's Expansion in the United States 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 Pactera's Expansion in the United States 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 Pactera's U.s needs to make to build a sustainable competitive advantage.
