Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?
This case focuses on Skype in the voice-over-IP (VoIP) industry. Its offering created such exceptional utility for users around the world that Skype has become a verb - to "skype" someone means to call someone using the Skype application. Yet despite explosive growth in demand, the company was not profitable in four out of the five years prior to its acquisition by Microsoft in 2011. The case allows participants to deepen their understanding of Blue Ocean Strategy by applying first-hand the concepts and tools of the Blue Ocean strategy sequence.
Authors :: W. Chan Kim, Katrina Ling, Jee Eun Lee, Renee A. Mauborgne
Swot Analysis of "Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?" written by W. Chan Kim, Katrina Ling, Jee Eun Lee, Renee A. Mauborgne includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Skype Ocean facing as an external strategic factors. Some of the topics covered in Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? casestudy better are - – increasing commodity prices, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
there is backlash against globalization, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Skype Ocean, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Skype Ocean 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? can be done for the following purposes –
1. Strategic planning using facts provided in Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? case study
2. Improving business portfolio management of Skype Ocean
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 Skype Ocean
Strengths Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Skype Ocean in Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? Harvard Business Review case study are -
Diverse revenue streams
– Skype Ocean is present in almost all the verticals within the industry. This has provided firm in Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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.
High brand equity
– Skype Ocean has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Skype Ocean to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Skype Ocean 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Skype Ocean is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Skype Ocean has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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.
Low bargaining power of suppliers
– Suppliers of Skype Ocean in the sector have low bargaining power. Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Skype Ocean to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Skype Ocean
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Skype Ocean does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Skype Ocean 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
– Skype Ocean is one of the most innovative firm in sector. Manager in Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Skype Ocean has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Skype Ocean 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.
Analytics focus
– Skype Ocean 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 W. Chan Kim, Katrina Ling, Jee Eun Lee, Renee A. Mauborgne 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? firm has clearly differentiated products in the market place. This has enabled Skype Ocean to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Skype Ocean to invest into research and development (R&D) and innovation.
Weaknesses Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? are -
No frontier risks strategy
– After analyzing the HBR case study Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?, 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.
Slow decision making process
– As mentioned earlier in the report, Skype Ocean 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. Skype Ocean 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.
Lack of clear differentiation of Skype Ocean products
– To increase the profitability and margins on the products, Skype Ocean needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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 Skype Ocean has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Skype Ocean needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Skype Ocean is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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 Skype Ocean 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 - Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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, W. Chan Kim, Katrina Ling, Jee Eun Lee, Renee A. Mauborgne suggests that, Skype Ocean 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.
Increasing silos among functional specialists
– The organizational structure of Skype Ocean is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Skype Ocean needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Skype Ocean to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Skype Ocean 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?, it seems that the employees of Skype Ocean 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? | 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? are -
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. Skype Ocean 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. Skype Ocean 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.
Building a culture of innovation
– managers at Skype Ocean 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Skype Ocean can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Skype Ocean 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Skype Ocean 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 Skype Ocean to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Skype Ocean 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, Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Skype Ocean 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.
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 Skype Ocean in the consumer business. Now Skype Ocean can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Skype Ocean is facing challenges because of the dominance of functional experts in the organization. Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Skype Ocean can use these opportunities to build new business models that can help the communities that Skype Ocean operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Skype Ocean can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Skype Ocean can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Skype Ocean 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.
Threats Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Skype Ocean 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?, Skype Ocean 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 .
Environmental challenges
– Skype Ocean 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. Skype Ocean can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Skype Ocean 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.
Technology acceleration in Forth Industrial Revolution
– Skype Ocean has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Skype Ocean 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.
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 Skype Ocean.
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. Skype Ocean needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Skype Ocean 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.
Increasing wage structure of Skype Ocean
– 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 Skype Ocean.
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. Skype Ocean can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Skype Ocean 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.
Shortening product life cycle
– it is one of the major threat that Skype Ocean is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Skype Ocean 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.
Weighted SWOT Analysis of Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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 Skype Ocean needs to make to build a sustainable competitive advantage.
