Swot Analysis of "Encyclopaedia Britannica (B)" written by Jeffrey Rayport, Carrie L. Ardito includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Britannica Encyclopaedia facing as an external strategic factors. Some of the topics covered in Encyclopaedia Britannica (B) case study are - Strategic Management Strategies, and Technology & Operations.
Some of the macro environment factors that can be used to understand the Encyclopaedia Britannica (B) casestudy better are - – there is backlash against globalization, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Encyclopaedia Britannica (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Encyclopaedia Britannica (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Britannica Encyclopaedia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Britannica Encyclopaedia 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 Encyclopaedia Britannica (B) can be done for the following purposes –
1. Strategic planning using facts provided in Encyclopaedia Britannica (B) case study
2. Improving business portfolio management of Britannica Encyclopaedia
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 Britannica Encyclopaedia
Strengths Encyclopaedia Britannica (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Britannica Encyclopaedia in Encyclopaedia Britannica (B) Harvard Business Review case study are -
Innovation driven organization
– Britannica Encyclopaedia is one of the most innovative firm in sector. Manager in Encyclopaedia Britannica (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Britannica Encyclopaedia has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Encyclopaedia Britannica (B) 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.
Highly skilled collaborators
– Britannica Encyclopaedia 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 Encyclopaedia Britannica (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Britannica Encyclopaedia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Encyclopaedia Britannica (B) 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.
Ability to recruit top talent
– Britannica Encyclopaedia is one of the leading recruiters in the industry. Managers in the Encyclopaedia Britannica (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Technology & Operations field
– Britannica Encyclopaedia 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 Britannica Encyclopaedia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Britannica Encyclopaedia in the sector have low bargaining power. Encyclopaedia Britannica (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Britannica Encyclopaedia to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Britannica Encyclopaedia
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Britannica Encyclopaedia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Britannica Encyclopaedia in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Britannica Encyclopaedia 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 Encyclopaedia Britannica (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Britannica Encyclopaedia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Britannica Encyclopaedia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Encyclopaedia Britannica (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Encyclopaedia Britannica (B) are -
High bargaining power of channel partners
– Because of the regulatory requirements, Jeffrey Rayport, Carrie L. Ardito suggests that, Britannica Encyclopaedia 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.
Skills based hiring
– The stress on hiring functional specialists at Britannica Encyclopaedia 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Encyclopaedia Britannica (B), is just above the industry average. Britannica Encyclopaedia 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.
Capital Spending Reduction
– Even during the low interest decade, Britannica Encyclopaedia has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Encyclopaedia Britannica (B), in the dynamic environment Britannica Encyclopaedia has struggled to respond to the nimble upstart competition. Britannica Encyclopaedia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Encyclopaedia Britannica (B) 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 Encyclopaedia Britannica (B) can leverage the sales team experience to cultivate customer relationships as Britannica Encyclopaedia is planning to shift buying processes online.
Lack of clear differentiation of Britannica Encyclopaedia products
– To increase the profitability and margins on the products, Britannica Encyclopaedia needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Britannica Encyclopaedia supply chain. Even after few cautionary changes mentioned in the HBR case study - Encyclopaedia Britannica (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Britannica Encyclopaedia vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Britannica Encyclopaedia has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the segment, Britannica Encyclopaedia 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Encyclopaedia Britannica (B) 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 Britannica Encyclopaedia 's lucrative customers.
Opportunities Encyclopaedia Britannica (B) | 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 Encyclopaedia Britannica (B) are -
Creating value in data economy
– The success of analytics program of Britannica Encyclopaedia has opened avenues for new revenue streams for the organization in the industry. This can help Britannica Encyclopaedia to build a more holistic ecosystem as suggested in the Encyclopaedia Britannica (B) case study. Britannica Encyclopaedia can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Britannica Encyclopaedia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Encyclopaedia Britannica (B) 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.
Developing new processes and practices
– Britannica Encyclopaedia 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Britannica Encyclopaedia 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.
Better consumer reach
– The expansion of the 5G network will help Britannica Encyclopaedia to increase its market reach. Britannica Encyclopaedia 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Britannica Encyclopaedia is facing challenges because of the dominance of functional experts in the organization. Encyclopaedia Britannica (B) 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Britannica Encyclopaedia 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.
Building a culture of innovation
– managers at Britannica Encyclopaedia 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Britannica Encyclopaedia 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. Britannica Encyclopaedia 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Britannica Encyclopaedia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Britannica Encyclopaedia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Britannica Encyclopaedia can use these opportunities to build new business models that can help the communities that Britannica Encyclopaedia operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Manufacturing automation
– Britannica Encyclopaedia 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.
Threats Encyclopaedia Britannica (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Encyclopaedia Britannica (B) are -
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 Britannica Encyclopaedia in the Technology & Operations sector and impact the bottomline of the organization.
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. Britannica Encyclopaedia needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Consumer confidence and its impact on Britannica Encyclopaedia 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.
Increasing wage structure of Britannica Encyclopaedia
– 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 Britannica Encyclopaedia.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Britannica Encyclopaedia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Encyclopaedia Britannica (B), Britannica Encyclopaedia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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.
Stagnating economy with rate increase
– Britannica Encyclopaedia 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Britannica Encyclopaedia 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 Encyclopaedia Britannica (B) .
Technology acceleration in Forth Industrial Revolution
– Britannica Encyclopaedia has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Britannica Encyclopaedia 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.
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.
Regulatory challenges
– Britannica Encyclopaedia 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 Technology & Operations industry regulations.
High dependence on third party suppliers
– Britannica Encyclopaedia 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.
Weighted SWOT Analysis of Encyclopaedia Britannica (B) 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 Encyclopaedia Britannica (B) 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 Encyclopaedia Britannica (B) 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 Encyclopaedia Britannica (B) 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 Encyclopaedia Britannica (B) 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 Britannica Encyclopaedia needs to make to build a sustainable competitive advantage.
