America Online: Using Information Technology to Better Serve the Customer SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of America Online: Using Information Technology to Better Serve the Customer
Mike Connors, president of AOL Technologies, examines several efforts to correct operational problems inhibiting the company's growth. What will need to be done to support growth and counter competition from Prodigy, Compuserv, and Internet-related services?
Swot Analysis of "America Online: Using Information Technology to Better Serve the Customer" written by James I. Cash Jr., Judy Stahl includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Compuserv Connors facing as an external strategic factors. Some of the topics covered in America Online: Using Information Technology to Better Serve the Customer case study are - Strategic Management Strategies, Customers, IT, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the America Online: Using Information Technology to Better Serve the Customer casestudy better are - – increasing commodity prices, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of America Online: Using Information Technology to Better Serve the Customer
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in America Online: Using Information Technology to Better Serve the Customer case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Compuserv Connors, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Compuserv Connors 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 America Online: Using Information Technology to Better Serve the Customer can be done for the following purposes –
1. Strategic planning using facts provided in America Online: Using Information Technology to Better Serve the Customer case study
2. Improving business portfolio management of Compuserv Connors
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 Compuserv Connors
Strengths America Online: Using Information Technology to Better Serve the Customer | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Compuserv Connors in America Online: Using Information Technology to Better Serve the Customer Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– America Online: Using Information Technology to Better Serve the Customer firm has clearly differentiated products in the market place. This has enabled Compuserv Connors to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Compuserv Connors to invest into research and development (R&D) and innovation.
Organizational Resilience of Compuserv Connors
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Compuserv Connors does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Compuserv Connors has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in America Online: Using Information Technology to Better Serve the Customer 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.
High brand equity
– Compuserv Connors has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Compuserv Connors to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Compuserv Connors 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 James I. Cash Jr., Judy Stahl 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.
Cross disciplinary teams
– Horizontal connected teams at the Compuserv Connors 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.
Ability to lead change in Technology & Operations field
– Compuserv Connors 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 Compuserv Connors in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Compuserv Connors is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Compuserv Connors 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 America Online: Using Information Technology to Better Serve the Customer - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Compuserv Connors is one of the most innovative firm in sector. Manager in America Online: Using Information Technology to Better Serve the Customer Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Compuserv Connors 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 America Online: Using Information Technology to Better Serve the Customer HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Compuserv Connors is one of the leading recruiters in the industry. Managers in the America Online: Using Information Technology to Better Serve the Customer are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses America Online: Using Information Technology to Better Serve the Customer | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of America Online: Using Information Technology to Better Serve the Customer are -
Aligning sales with marketing
– It come across in the case study America Online: Using Information Technology to Better Serve the Customer 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 America Online: Using Information Technology to Better Serve the Customer can leverage the sales team experience to cultivate customer relationships as Compuserv Connors is planning to shift buying processes online.
High cash cycle compare to competitors
Compuserv Connors 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.
Skills based hiring
– The stress on hiring functional specialists at Compuserv Connors 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 decision making process
– As mentioned earlier in the report, Compuserv Connors 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. Compuserv Connors 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study America Online: Using Information Technology to Better Serve the Customer, is just above the industry average. Compuserv Connors 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study America Online: Using Information Technology to Better Serve the Customer, in the dynamic environment Compuserv Connors has struggled to respond to the nimble upstart competition. Compuserv Connors has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Compuserv Connors 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.
Lack of clear differentiation of Compuserv Connors products
– To increase the profitability and margins on the products, Compuserv Connors needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Compuserv Connors, firm in the HBR case study America Online: Using Information Technology to Better Serve the Customer needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Compuserv Connors is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Compuserv Connors needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Compuserv Connors to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Compuserv Connors 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 - America Online: Using Information Technology to Better Serve the Customer should strive to include more intangible value offerings along with its core products and services.
Opportunities America Online: Using Information Technology to Better Serve the Customer | 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 America Online: Using Information Technology to Better Serve the Customer are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Compuserv Connors can use these opportunities to build new business models that can help the communities that Compuserv Connors operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Leveraging digital technologies
– Compuserv Connors can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Compuserv Connors 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. Compuserv Connors 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. Compuserv Connors 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.
Buying journey improvements
– Compuserv Connors can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. America Online: Using Information Technology to Better Serve the Customer 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Compuserv Connors 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, America Online: Using Information Technology to Better Serve the Customer, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Compuserv Connors is facing challenges because of the dominance of functional experts in the organization. America Online: Using Information Technology to Better Serve the Customer 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.
Developing new processes and practices
– Compuserv Connors 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 Compuserv Connors 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.
Loyalty marketing
– Compuserv Connors 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.
Creating value in data economy
– The success of analytics program of Compuserv Connors has opened avenues for new revenue streams for the organization in the industry. This can help Compuserv Connors to build a more holistic ecosystem as suggested in the America Online: Using Information Technology to Better Serve the Customer case study. Compuserv Connors can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Compuserv Connors can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Compuserv Connors 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.
Threats America Online: Using Information Technology to Better Serve the Customer External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study America Online: Using Information Technology to Better Serve the Customer are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study America Online: Using Information Technology to Better Serve the Customer, Compuserv Connors 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Compuserv Connors 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.
Technology acceleration in Forth Industrial Revolution
– Compuserv Connors has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Compuserv Connors 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.
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 Compuserv Connors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Compuserv Connors 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
– Compuserv Connors 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.
Environmental challenges
– Compuserv Connors 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. Compuserv Connors can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Stagnating economy with rate increase
– Compuserv Connors can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Compuserv Connors
– 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 Compuserv Connors.
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. Compuserv Connors can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Compuserv Connors 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.
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 Compuserv Connors in the Technology & Operations sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of America Online: Using Information Technology to Better Serve the Customer 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 America Online: Using Information Technology to Better Serve the Customer 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 America Online: Using Information Technology to Better Serve the Customer 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 America Online: Using Information Technology to Better Serve the Customer 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 America Online: Using Information Technology to Better Serve the Customer 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 Compuserv Connors needs to make to build a sustainable competitive advantage.
