Betfair vs. UK Bookmakers SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Betfair vs. UK Bookmakers
To maximize their effectiveness, color cases should be printed in color.Betting exchanges provide an electronic platform that allows ordinary consumers to not only back teams to win, but also to lay odds for other punters to back. This business model allows punters to cut out the middle-man of the bookmaker, and leads to a much more efficient 2-sided market. Betfair.com's domination of the betting exchange has threatened to undermine the core of the traditional bookmakers' business model. The case examines two aspects of the industry: 1. What specific choices did Betfair make to become the dominant betting exchange, winning the competitive battle over Flutter.com? 2. At what stages do Betfair.com's business model and those of the bookmakers interact? Will Betfair.com naturally come to dominate the industry, and if so how should the bookmakers react?
Authors :: Ramon Casadesus-Masanell, Neil Campbell
Swot Analysis of "Betfair vs. UK Bookmakers" written by Ramon Casadesus-Masanell, Neil Campbell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bookmakers Betfair facing as an external strategic factors. Some of the topics covered in Betfair vs. UK Bookmakers case study are - Strategic Management Strategies, Competition, Economics, IT, Strategic thinking and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Betfair vs. UK Bookmakers casestudy better are - – increasing energy prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, wage bills are increasing,
increasing transportation and logistics costs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Betfair vs. UK Bookmakers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Betfair vs. UK Bookmakers case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bookmakers Betfair, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bookmakers Betfair 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 Betfair vs. UK Bookmakers can be done for the following purposes –
1. Strategic planning using facts provided in Betfair vs. UK Bookmakers case study
2. Improving business portfolio management of Bookmakers Betfair
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 Bookmakers Betfair
Strengths Betfair vs. UK Bookmakers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bookmakers Betfair in Betfair vs. UK Bookmakers Harvard Business Review case study are -
Strong track record of project management
– Bookmakers Betfair is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Bookmakers Betfair in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Bookmakers Betfair 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.
Operational resilience
– The operational resilience strategy in the Betfair vs. UK Bookmakers 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.
Learning organization
- Bookmakers Betfair 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 Bookmakers Betfair is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Betfair vs. UK Bookmakers Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Bookmakers Betfair
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bookmakers Betfair does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Bookmakers Betfair 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 Betfair vs. UK Bookmakers HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Bookmakers Betfair has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bookmakers Betfair to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Bookmakers Betfair has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Betfair vs. UK Bookmakers 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.
Diverse revenue streams
– Bookmakers Betfair is present in almost all the verticals within the industry. This has provided firm in Betfair vs. UK Bookmakers 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 Bookmakers Betfair in the sector have low bargaining power. Betfair vs. UK Bookmakers has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bookmakers Betfair to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Bookmakers Betfair is one of the most innovative firm in sector. Manager in Betfair vs. UK Bookmakers Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Betfair vs. UK Bookmakers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Betfair vs. UK Bookmakers are -
No frontier risks strategy
– After analyzing the HBR case study Betfair vs. UK Bookmakers, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bookmakers Betfair 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Betfair vs. UK Bookmakers, in the dynamic environment Bookmakers Betfair has struggled to respond to the nimble upstart competition. Bookmakers Betfair has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Bookmakers Betfair products
– To increase the profitability and margins on the products, Bookmakers Betfair needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Betfair vs. UK Bookmakers 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 Bookmakers Betfair 's lucrative customers.
Need for greater diversity
– Bookmakers Betfair 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.
Low market penetration in new markets
– Outside its home market of Bookmakers Betfair, firm in the HBR case study Betfair vs. UK Bookmakers needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Betfair vs. UK Bookmakers, is just above the industry average. Bookmakers Betfair 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ramon Casadesus-Masanell, Neil Campbell suggests that, Bookmakers Betfair 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Betfair vs. UK Bookmakers, it seems that the employees of Bookmakers Betfair 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.
Interest costs
– Compare to the competition, Bookmakers Betfair 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 Betfair vs. UK Bookmakers | 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 Betfair vs. UK Bookmakers 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. Bookmakers Betfair 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. Bookmakers Betfair 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.
Creating value in data economy
– The success of analytics program of Bookmakers Betfair has opened avenues for new revenue streams for the organization in the industry. This can help Bookmakers Betfair to build a more holistic ecosystem as suggested in the Betfair vs. UK Bookmakers case study. Bookmakers Betfair can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bookmakers Betfair 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bookmakers Betfair 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 Bookmakers Betfair to hire the very best people irrespective of their geographical location.
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. Bookmakers Betfair can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Bookmakers Betfair to increase its market reach. Bookmakers Betfair 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bookmakers Betfair can use these opportunities to build new business models that can help the communities that Bookmakers Betfair operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Bookmakers Betfair 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 Betfair vs. UK Bookmakers - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bookmakers Betfair to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Bookmakers Betfair can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Bookmakers Betfair 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bookmakers Betfair 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, Betfair vs. UK Bookmakers, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bookmakers Betfair can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Bookmakers Betfair 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.
Threats Betfair vs. UK Bookmakers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Betfair vs. UK Bookmakers are -
Shortening product life cycle
– it is one of the major threat that Bookmakers Betfair is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Bookmakers Betfair has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Bookmakers Betfair 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.
Environmental challenges
– Bookmakers Betfair 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. Bookmakers Betfair 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 Bookmakers Betfair 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.
Consumer confidence and its impact on Bookmakers Betfair 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Betfair vs. UK Bookmakers, Bookmakers Betfair 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 Bookmakers Betfair
– 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 Bookmakers Betfair.
Regulatory challenges
– Bookmakers Betfair 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.
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. Bookmakers Betfair 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
– Bookmakers Betfair 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bookmakers Betfair with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bookmakers Betfair 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 Betfair vs. UK Bookmakers .
Weighted SWOT Analysis of Betfair vs. UK Bookmakers 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 Betfair vs. UK Bookmakers 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 Betfair vs. UK Bookmakers 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 Betfair vs. UK Bookmakers 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 Betfair vs. UK Bookmakers 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 Bookmakers Betfair needs to make to build a sustainable competitive advantage.
