Alibris is an Internet-era company providing search and fulfillment services for hard-to-find (rare, used, and out-of-print) books. At the time of the case, the company had made decisions to change its revenue model, to become involved in the fulfillment process for each book it sells by establishing a cross-dock facility, and to purchase Oracle's Internet commerce software. However, the implementation of this software has been very difficult, delaying the launch of the new fulfillment business and costing large amounts of money at a time when cash is scarce. The company's leaders, who are not IT professionals, must decide whether to continue with Oracle or begin anew with another product.
Swot Analysis of "Alibris (A)" written by Andrew McAfee, Kerry Herman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fulfillment Alibris facing as an external strategic factors. Some of the topics covered in Alibris (A) case study are - Strategic Management Strategies, Data, Disruptive innovation, Internet, IT, Marketing, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Alibris (A) casestudy better are - – talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alibris (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fulfillment Alibris, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fulfillment Alibris 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 Alibris (A) can be done for the following purposes –
1. Strategic planning using facts provided in Alibris (A) case study
2. Improving business portfolio management of Fulfillment Alibris
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fulfillment Alibris
Strengths Alibris (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fulfillment Alibris in Alibris (A) Harvard Business Review case study are -
Organizational Resilience of Fulfillment Alibris
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fulfillment Alibris does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Fulfillment Alibris has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fulfillment Alibris to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Technology & Operations industry
– Alibris (A) firm has clearly differentiated products in the market place. This has enabled Fulfillment Alibris to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Fulfillment Alibris to invest into research and development (R&D) and innovation.
Training and development
– Fulfillment Alibris has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Alibris (A) 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
– Fulfillment Alibris is present in almost all the verticals within the industry. This has provided firm in Alibris (A) 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 Fulfillment Alibris in the sector have low bargaining power. Alibris (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fulfillment Alibris to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Fulfillment Alibris is one of the leading recruiters in the industry. Managers in the Alibris (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Fulfillment Alibris 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 Andrew McAfee, Kerry Herman 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.
Ability to lead change in Technology & Operations field
– Fulfillment Alibris is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Fulfillment Alibris in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Fulfillment Alibris 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.
Highly skilled collaborators
– Fulfillment Alibris 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 Alibris (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Fulfillment Alibris 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 Fulfillment Alibris is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Alibris (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Alibris (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alibris (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Alibris (A), it seems that the employees of Fulfillment Alibris 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.
Aligning sales with marketing
– It come across in the case study Alibris (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Alibris (A) can leverage the sales team experience to cultivate customer relationships as Fulfillment Alibris is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fulfillment Alibris is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Alibris (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Fulfillment Alibris products
– To increase the profitability and margins on the products, Fulfillment Alibris needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Fulfillment Alibris has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High 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 Fulfillment Alibris supply chain. Even after few cautionary changes mentioned in the HBR case study - Alibris (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fulfillment Alibris vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Fulfillment Alibris is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Fulfillment Alibris needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fulfillment Alibris to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Fulfillment Alibris 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 strategic competitive environment developments
– As Alibris (A) HBR case study mentions - Fulfillment Alibris takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High operating costs
– Compare to the competitors, firm in the HBR case study Alibris (A) 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 Fulfillment Alibris 's lucrative customers.
Interest costs
– Compare to the competition, Fulfillment Alibris 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 Alibris (A) | 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 Alibris (A) are -
Using analytics as competitive advantage
– Fulfillment Alibris 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 Alibris (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fulfillment Alibris to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Fulfillment Alibris 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.
Developing new processes and practices
– Fulfillment Alibris can develop new processes and procedures in Technology & Operations 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.
Better consumer reach
– The expansion of the 5G network will help Fulfillment Alibris to increase its market reach. Fulfillment Alibris 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.
Buying journey improvements
– Fulfillment Alibris can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Alibris (A) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fulfillment Alibris 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 Fulfillment Alibris to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Fulfillment Alibris has opened avenues for new revenue streams for the organization in the industry. This can help Fulfillment Alibris to build a more holistic ecosystem as suggested in the Alibris (A) case study. Fulfillment Alibris can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fulfillment Alibris in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fulfillment Alibris can use these opportunities to build new business models that can help the communities that Fulfillment Alibris operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Building a culture of innovation
– managers at Fulfillment Alibris 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 Technology & Operations segment.
Manufacturing automation
– Fulfillment Alibris can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
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 Fulfillment Alibris 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.
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 Fulfillment Alibris in the consumer business. Now Fulfillment Alibris can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Alibris (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alibris (A) are -
Environmental challenges
– Fulfillment Alibris 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. Fulfillment Alibris can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Stagnating economy with rate increase
– Fulfillment Alibris 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.
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.
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 Fulfillment Alibris business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Fulfillment Alibris is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fulfillment Alibris with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Fulfillment Alibris 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.
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. Fulfillment Alibris needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Fulfillment Alibris will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Fulfillment Alibris 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fulfillment Alibris in the Technology & Operations industry. The Technology & Operations 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.
Increasing wage structure of Fulfillment Alibris
– 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 Fulfillment Alibris.
Technology acceleration in Forth Industrial Revolution
– Fulfillment Alibris has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Fulfillment Alibris needs to keep up with the evolution of technology in the Technology & Operations 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.
Weighted SWOT Analysis of Alibris (A) 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 Alibris (A) 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 Alibris (A) 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 Alibris (A) 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 Alibris (A) 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 Fulfillment Alibris needs to make to build a sustainable competitive advantage.