Microsoft's Acquisition of Sendit (B): The Valuation Dilemma SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Microsoft's Acquisition of Sendit (B): The Valuation Dilemma
The case describes Microsoft's first significant acquisition in Europe and its first in the telecom equipment (software) market. SendIt is a publicly listed Swedish start-up, which offers the only Windows based solutions to the IP-based mobile phone services market. The acquisition starts in high tone, loses momentum and is finally integrated with some degree of success.
Swot Analysis of "Microsoft's Acquisition of Sendit (B): The Valuation Dilemma" written by Maurizio Zollo, Robert J. Crawford includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sendit Microsoft's facing as an external strategic factors. Some of the topics covered in Microsoft's Acquisition of Sendit (B): The Valuation Dilemma case study are - Strategic Management Strategies, Financial analysis, Mergers & acquisitions, Negotiations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Microsoft's Acquisition of Sendit (B): The Valuation Dilemma casestudy better are - – technology disruption, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
wage bills are increasing, there is backlash against globalization, etc
Introduction to SWOT Analysis of Microsoft's Acquisition of Sendit (B): The Valuation Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Microsoft's Acquisition of Sendit (B): The Valuation Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sendit Microsoft's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sendit Microsoft'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 Microsoft's Acquisition of Sendit (B): The Valuation Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in Microsoft's Acquisition of Sendit (B): The Valuation Dilemma case study
2. Improving business portfolio management of Sendit Microsoft'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 Sendit Microsoft's
Strengths Microsoft's Acquisition of Sendit (B): The Valuation Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sendit Microsoft's in Microsoft's Acquisition of Sendit (B): The Valuation Dilemma Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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 Sendit Microsoft's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Sendit Microsoft's 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.
Innovation driven organization
– Sendit Microsoft's is one of the most innovative firm in sector. Manager in Microsoft's Acquisition of Sendit (B): The Valuation Dilemma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Sendit Microsoft's is present in almost all the verticals within the industry. This has provided firm in Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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.
Ability to lead change in Strategy & Execution field
– Sendit Microsoft's 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 Sendit Microsoft's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Sendit Microsoft's is one of the leading recruiters in the industry. Managers in the Microsoft's Acquisition of Sendit (B): The Valuation Dilemma are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Sendit Microsoft's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sendit Microsoft's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Sendit Microsoft's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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.
Successful track record of launching new products
– Sendit Microsoft's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sendit Microsoft'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.
Effective Research and Development (R&D)
– Sendit Microsoft's 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 Microsoft's Acquisition of Sendit (B): The Valuation Dilemma - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Sendit Microsoft'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 Sendit Microsoft's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Microsoft's Acquisition of Sendit (B): The Valuation Dilemma Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Microsoft's Acquisition of Sendit (B): The Valuation Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Microsoft's Acquisition of Sendit (B): The Valuation Dilemma are -
Increasing silos among functional specialists
– The organizational structure of Sendit Microsoft's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Sendit Microsoft's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sendit Microsoft's to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Microsoft's Acquisition of Sendit (B): The Valuation Dilemma, 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.
Need for greater diversity
– Sendit Microsoft'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.
High bargaining power of channel partners
– Because of the regulatory requirements, Maurizio Zollo, Robert J. Crawford suggests that, Sendit Microsoft'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.
High operating costs
– Compare to the competitors, firm in the HBR case study Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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 Sendit Microsoft's 's lucrative customers.
Slow to strategic competitive environment developments
– As Microsoft's Acquisition of Sendit (B): The Valuation Dilemma HBR case study mentions - Sendit Microsoft'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.
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 Sendit Microsoft's supply chain. Even after few cautionary changes mentioned in the HBR case study - Microsoft's Acquisition of Sendit (B): The Valuation Dilemma, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sendit Microsoft's vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Microsoft's Acquisition of Sendit (B): The Valuation Dilemma, in the dynamic environment Sendit Microsoft's has struggled to respond to the nimble upstart competition. Sendit Microsoft's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Sendit Microsoft's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Sendit Microsoft's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sendit Microsoft's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Microsoft's Acquisition of Sendit (B): The Valuation Dilemma can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Sendit Microsoft's 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.
Opportunities Microsoft's Acquisition of Sendit (B): The Valuation Dilemma | 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 Microsoft's Acquisition of Sendit (B): The Valuation Dilemma are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sendit Microsoft's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Sendit Microsoft's has opened avenues for new revenue streams for the organization in the industry. This can help Sendit Microsoft's to build a more holistic ecosystem as suggested in the Microsoft's Acquisition of Sendit (B): The Valuation Dilemma case study. Sendit Microsoft's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Sendit Microsoft's to increase its market reach. Sendit Microsoft's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sendit Microsoft's is facing challenges because of the dominance of functional experts in the organization. Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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.
Building a culture of innovation
– managers at Sendit Microsoft'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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sendit Microsoft's can use these opportunities to build new business models that can help the communities that Sendit Microsoft's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Sendit Microsoft'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.
Loyalty marketing
– Sendit Microsoft'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.
Leveraging digital technologies
– Sendit Microsoft's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sendit Microsoft'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.
Learning at scale
– Online learning technologies has now opened space for Sendit Microsoft'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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sendit Microsoft's 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 Sendit Microsoft's to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sendit Microsoft's 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 Microsoft's Acquisition of Sendit (B): The Valuation Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Microsoft's Acquisition of Sendit (B): The Valuation Dilemma are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sendit Microsoft'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 Microsoft's Acquisition of Sendit (B): The Valuation Dilemma .
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.
Technology acceleration in Forth Industrial Revolution
– Sendit Microsoft's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Sendit Microsoft's 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.
Increasing wage structure of Sendit Microsoft'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 Sendit Microsoft's.
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. Sendit Microsoft's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Sendit Microsoft's in the Strategy & Execution sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Sendit Microsoft'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. Sendit Microsoft's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sendit Microsoft'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.
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 Sendit Microsoft's.
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 Sendit Microsoft's business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Sendit Microsoft'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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Microsoft's Acquisition of Sendit (B): The Valuation Dilemma, Sendit Microsoft'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 .
Weighted SWOT Analysis of Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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 Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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 Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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 Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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 Microsoft's Acquisition of Sendit (B): The Valuation Dilemma 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 Sendit Microsoft's needs to make to build a sustainable competitive advantage.