Case Study Description of GT Nexus: Leader in Cloud Computing Supply Chain Management
T Nexus was incorporated in 2000 and in 2013 became a leader in cloud-based supply-chain management solutions. Born as a technology platform dedicated to the shipping industry and in particular to facilitating supply-chain management for major international carriers, in 2002 GT Nexus became in an SaaS (software as a service) provider, integrating analytics software on its platform. The Global Trade Platform introduced by GT Nexus was a major innovation in the shipping industry: it offered a standardized interface to shippers seeking to book cargo space with major carriers and allowed carriers to manage a far larger customer volume. Over time, the GTN platform became a non-industry specific supply-chain solution, used by some of the largest MNCs (multi-national corporations). GT Nexus expanded its product offering and platform, designing its own software solutions, such as the Trade Solution platform for financing, by partnering with other software companies, such as MicroStrategy and Flagship Custom Service, or by directly acquiring competitors, in the case of Metaship AG in Europe. A final merger with TradeCard in 2013 made GT Nexus the market leader in cloud-based supply-chain management software with over US$100 billion of international trade transactions managed on the platform. After the merger with TradeCard, GT Nexus offered a complete procure-to-pay solution on the cloud, covering every aspect of supply-chain management. The company experienced brisk growth as a pioneer of cloud-computing technology applied to supply chains. GT Nexus had several potential directions to sustain its growth. It could expand on its traditional customer base, the shipping industry, by aggressively pursuing market share, increase its software offerings to compete with ERP (enterprise resource planning) vendors, or further leverage its cloud-computing technology to deliver greater value.
Swot Analysis of "GT Nexus: Leader in Cloud Computing Supply Chain Management" written by Ali Farhoomand, Davide Lentini includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nexus Gt facing as an external strategic factors. Some of the topics covered in GT Nexus: Leader in Cloud Computing Supply Chain Management case study are - Strategic Management Strategies, Internet, IT, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the GT Nexus: Leader in Cloud Computing Supply Chain Management casestudy better are - – increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing commodity prices, there is backlash against globalization, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, geopolitical disruptions, etc
Introduction to SWOT Analysis of GT Nexus: Leader in Cloud Computing Supply Chain Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GT Nexus: Leader in Cloud Computing Supply Chain Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nexus Gt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nexus Gt 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 GT Nexus: Leader in Cloud Computing Supply Chain Management can be done for the following purposes –
1. Strategic planning using facts provided in GT Nexus: Leader in Cloud Computing Supply Chain Management case study
2. Improving business portfolio management of Nexus Gt
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 Nexus Gt
Strengths GT Nexus: Leader in Cloud Computing Supply Chain Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nexus Gt in GT Nexus: Leader in Cloud Computing Supply Chain Management Harvard Business Review case study are -
Highly skilled collaborators
– Nexus Gt 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 GT Nexus: Leader in Cloud Computing Supply Chain Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Nexus Gt in the sector have low bargaining power. GT Nexus: Leader in Cloud Computing Supply Chain Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nexus Gt to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the GT Nexus: Leader in Cloud Computing Supply Chain Management 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.
Superior customer experience
– The customer experience strategy of Nexus Gt in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Nexus Gt 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 Nexus Gt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in GT Nexus: Leader in Cloud Computing Supply Chain Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Nexus Gt is one of the most innovative firm in sector. Manager in GT Nexus: Leader in Cloud Computing Supply Chain Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Nexus Gt 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.
Sustainable margins compare to other players in Strategy & Execution industry
– GT Nexus: Leader in Cloud Computing Supply Chain Management firm has clearly differentiated products in the market place. This has enabled Nexus Gt to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Nexus Gt to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Nexus Gt 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.
Diverse revenue streams
– Nexus Gt is present in almost all the verticals within the industry. This has provided firm in GT Nexus: Leader in Cloud Computing Supply Chain Management 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.
Analytics focus
– Nexus Gt 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 Ali Farhoomand, Davide Lentini 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.
Ability to lead change in Strategy & Execution field
– Nexus Gt 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 Nexus Gt in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses GT Nexus: Leader in Cloud Computing Supply Chain Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GT Nexus: Leader in Cloud Computing Supply Chain Management are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Nexus Gt supply chain. Even after few cautionary changes mentioned in the HBR case study - GT Nexus: Leader in Cloud Computing Supply Chain Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nexus Gt vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the GT Nexus: Leader in Cloud Computing Supply Chain Management 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 Nexus Gt has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nexus Gt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study GT Nexus: Leader in Cloud Computing Supply Chain Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Nexus Gt, firm in the HBR case study GT Nexus: Leader in Cloud Computing Supply Chain Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Nexus Gt has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Aligning sales with marketing
– It come across in the case study GT Nexus: Leader in Cloud Computing Supply Chain Management 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 GT Nexus: Leader in Cloud Computing Supply Chain Management can leverage the sales team experience to cultivate customer relationships as Nexus Gt is planning to shift buying processes online.
High cash cycle compare to competitors
Nexus Gt 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.
Skills based hiring
– The stress on hiring functional specialists at Nexus Gt 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 Nexus Gt 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 - GT Nexus: Leader in Cloud Computing Supply Chain Management should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Nexus Gt 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali Farhoomand, Davide Lentini suggests that, Nexus Gt 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.
Opportunities GT Nexus: Leader in Cloud Computing Supply Chain Management | 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 GT Nexus: Leader in Cloud Computing Supply Chain Management are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Nexus Gt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Nexus Gt 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 GT Nexus: Leader in Cloud Computing Supply Chain Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nexus Gt to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Nexus Gt 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.
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 Nexus Gt in the consumer business. Now Nexus Gt can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nexus Gt 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.
Learning at scale
– Online learning technologies has now opened space for Nexus Gt 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.
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. Nexus Gt 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. Nexus Gt 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nexus Gt can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Nexus Gt 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.
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 Nexus Gt 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.
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. Nexus Gt can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Nexus Gt 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nexus Gt 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.
Threats GT Nexus: Leader in Cloud Computing Supply Chain Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GT Nexus: Leader in Cloud Computing Supply Chain Management are -
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. Nexus Gt needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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 Nexus Gt.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Nexus Gt 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
– Nexus Gt 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.
Regulatory challenges
– Nexus Gt 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study GT Nexus: Leader in Cloud Computing Supply Chain Management, Nexus Gt 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 .
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. Nexus Gt 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.
Increasing wage structure of Nexus Gt
– 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 Nexus Gt.
Environmental challenges
– Nexus Gt 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. Nexus Gt can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Nexus Gt 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.
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 Nexus Gt business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of GT Nexus: Leader in Cloud Computing Supply Chain Management 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 GT Nexus: Leader in Cloud Computing Supply Chain Management 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 GT Nexus: Leader in Cloud Computing Supply Chain Management 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 GT Nexus: Leader in Cloud Computing Supply Chain Management 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 GT Nexus: Leader in Cloud Computing Supply Chain Management 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 Nexus Gt needs to make to build a sustainable competitive advantage.
