Gazelle has pioneered a reCommerce intermediation model: it buys used electronics from consumers and resells them on eBay or to wholesalers. Going forward, its two main strategic challenges are: 1) deciding how much to rely on partnerships with large retailers for growth; 2) deciding whether to continue as a "merchant," i.e., buying and reselling goods (and thereby taking inventory risk), or to transform itself into a "two-sided platform" connecting sellers and buyers without taking inventory risk.
Swot Analysis of "Gazelle in 2012" written by Andrei Hagiu, James Weber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gazelle Recommerce facing as an external strategic factors. Some of the topics covered in Gazelle in 2012 case study are - Strategic Management Strategies, Economics, Entrepreneurship, Growth strategy, Joint ventures, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Gazelle in 2012 casestudy better are - – increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gazelle in 2012 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gazelle Recommerce, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gazelle Recommerce 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 Gazelle in 2012 can be done for the following purposes –
1. Strategic planning using facts provided in Gazelle in 2012 case study
2. Improving business portfolio management of Gazelle Recommerce
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 Gazelle Recommerce
Strengths Gazelle in 2012 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gazelle Recommerce in Gazelle in 2012 Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Gazelle Recommerce digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gazelle Recommerce 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.
Cross disciplinary teams
– Horizontal connected teams at the Gazelle Recommerce 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.
Learning organization
- Gazelle Recommerce 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 Gazelle Recommerce is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gazelle in 2012 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Gazelle Recommerce 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 Andrei Hagiu, James Weber 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.
Successful track record of launching new products
– Gazelle Recommerce has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gazelle Recommerce 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.
Diverse revenue streams
– Gazelle Recommerce is present in almost all the verticals within the industry. This has provided firm in Gazelle in 2012 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.
Strong track record of project management
– Gazelle Recommerce is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Gazelle Recommerce
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gazelle Recommerce does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– Gazelle in 2012 firm has clearly differentiated products in the market place. This has enabled Gazelle Recommerce to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Gazelle Recommerce to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Gazelle Recommerce 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.
Superior customer experience
– The customer experience strategy of Gazelle Recommerce in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Gazelle Recommerce has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gazelle Recommerce to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Gazelle in 2012 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gazelle in 2012 are -
Workers concerns about automation
– As automation is fast increasing in the segment, Gazelle Recommerce 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.
Interest costs
– Compare to the competition, Gazelle Recommerce 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Gazelle in 2012, is just above the industry average. Gazelle Recommerce 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.
Products dominated business model
– Even though Gazelle Recommerce 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 - Gazelle in 2012 should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Gazelle Recommerce 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.
Increasing silos among functional specialists
– The organizational structure of Gazelle Recommerce is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Gazelle Recommerce needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gazelle Recommerce to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Gazelle Recommerce 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. Gazelle Recommerce 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.
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 Gazelle Recommerce supply chain. Even after few cautionary changes mentioned in the HBR case study - Gazelle in 2012, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gazelle Recommerce vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Gazelle in 2012 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 Gazelle Recommerce 's lucrative customers.
Slow to strategic competitive environment developments
– As Gazelle in 2012 HBR case study mentions - Gazelle Recommerce 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Gazelle in 2012, it seems that the employees of Gazelle Recommerce don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Gazelle in 2012 | 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 Gazelle in 2012 are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gazelle Recommerce 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, Gazelle in 2012, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gazelle Recommerce 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.
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. Gazelle Recommerce can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gazelle Recommerce can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Gazelle Recommerce 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.
Using analytics as competitive advantage
– Gazelle Recommerce 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 Gazelle in 2012 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gazelle Recommerce to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gazelle Recommerce is facing challenges because of the dominance of functional experts in the organization. Gazelle in 2012 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.
Better consumer reach
– The expansion of the 5G network will help Gazelle Recommerce to increase its market reach. Gazelle Recommerce 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.
Learning at scale
– Online learning technologies has now opened space for Gazelle Recommerce 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.
Buying journey improvements
– Gazelle Recommerce can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gazelle in 2012 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.
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. Gazelle Recommerce 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. Gazelle Recommerce 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.
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 Gazelle Recommerce in the consumer business. Now Gazelle Recommerce can target international markets with far fewer capital restrictions requirements than the existing system.
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. Gazelle Recommerce can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Gazelle in 2012 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gazelle in 2012 are -
Environmental challenges
– Gazelle Recommerce 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. Gazelle Recommerce can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Gazelle Recommerce needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gazelle Recommerce 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 Gazelle in 2012 .
Regulatory challenges
– Gazelle Recommerce 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 Gazelle Recommerce 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.
High dependence on third party suppliers
– Gazelle Recommerce 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gazelle in 2012, Gazelle Recommerce 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 wage structure of Gazelle Recommerce
– 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 Gazelle Recommerce.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gazelle Recommerce 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 Gazelle Recommerce business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Gazelle Recommerce 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.
Technology acceleration in Forth Industrial Revolution
– Gazelle Recommerce has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Gazelle Recommerce 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.
Shortening product life cycle
– it is one of the major threat that Gazelle Recommerce is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Gazelle in 2012 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 Gazelle in 2012 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 Gazelle in 2012 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 Gazelle in 2012 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 Gazelle in 2012 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 Gazelle Recommerce needs to make to build a sustainable competitive advantage.
