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 household debt because of falling income levels, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, technology disruption, talent flight as more people leaving formal jobs, increasing energy prices,
there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
Operational resilience
– The operational resilience strategy in the Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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.
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.
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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Skype Ocean digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Skype Ocean 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.
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.
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.
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.
Learning organization
- Skype Ocean 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 Skype Ocean is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Skype Ocean 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Skype Ocean is one of the leading recruiters in the industry. Managers in the Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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 -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?, is just above the industry average. Skype Ocean 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.
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.
Low market penetration in new markets
– Outside its home market of Skype Ocean, firm in the HBR case study Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?, in the dynamic environment Skype Ocean has struggled to respond to the nimble upstart competition. Skype Ocean has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 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 Skype Ocean supply chain. Even after few cautionary changes mentioned in the HBR case study - Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Skype Ocean vulnerable to further global disruptions in South East Asia.
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.
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.
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.
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.
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 -
Learning at scale
– Online learning technologies has now opened space for Skype Ocean 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 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.
Buying journey improvements
– Skype Ocean can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? 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.
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.
Using analytics as competitive advantage
– Skype Ocean 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 Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Skype Ocean to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Skype Ocean can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, 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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Skype Ocean 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.
Better consumer reach
– The expansion of the 5G network will help Skype Ocean to increase its market reach. Skype Ocean 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.
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.
Creating value in data economy
– The success of analytics program of Skype Ocean has opened avenues for new revenue streams for the organization in the industry. This can help Skype Ocean to build a more holistic ecosystem as suggested in the Skype in the Voice-over-IP Industry: A Commercially Viable Blue Ocean? case study. Skype Ocean can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Skype Ocean 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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Skype Ocean with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Skype Ocean.
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.
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.
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 Skype Ocean 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.
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? .
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.
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 Skype Ocean business can come under increasing regulations regarding data privacy, data security, etc.
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.