Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support
In the 1990's, Red Hat established itself as a leading proponent of the open source software movement and sought to carve out for itself a significant role in the open source marketplace. As of 2011, the company reported $177 million in Non-GAAP operating income in FY2010, based on revenues of $748 million. Red Hat's market capitalization was set at $8 billion as of January 25, 2011. It operated 65 offices worldwide, including 12 Global Support Service Centers, and employed 3,580 people. The Red Hat brand is most closely associated with Linux even though their stable of product offerings grew to include a number of other noteworthy system software and middleware products, such as JBoss and Red Hat Enterprise Virtualization. As Red Hat's Linux product line came to be widely accepted as a enterprise software platform, the company transformed its thinking about and delivery of customer support. This case study explores the innovative ways that Red Hat went about this transformartion process.
Swot Analysis of "Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support" written by Richard M. Kesner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hat Red facing as an external strategic factors. Some of the topics covered in Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support case study are - Strategic Management Strategies, IT, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hat Red, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hat Red 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support can be done for the following purposes –
1. Strategic planning using facts provided in Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support case study
2. Improving business portfolio management of Hat Red
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 Hat Red
Strengths Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hat Red in Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Hat Red 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Hat Red digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hat Red has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Hat Red
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hat Red does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Hat Red 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.
Diverse revenue streams
– Hat Red is present in almost all the verticals within the industry. This has provided firm in Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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.
High brand equity
– Hat Red has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hat Red to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Hat Red is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Hat Red 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
– Hat Red 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 Hat Red 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 Hat Red in the sector have low bargaining power. Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hat Red to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Hat Red in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support are -
No frontier risks strategy
– After analyzing the HBR case study Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Increasing silos among functional specialists
– The organizational structure of Hat Red is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Hat Red needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hat Red to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support, is just above the industry average. Hat Red needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Hat Red 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. Hat Red 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Richard M. Kesner suggests that, Hat Red 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 Hat Red 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.
Capital Spending Reduction
– Even during the low interest decade, Hat Red 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.
Products dominated business model
– Even though Hat Red 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 - Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Hat Red 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.
Aligning sales with marketing
– It come across in the case study Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support can leverage the sales team experience to cultivate customer relationships as Hat Red is planning to shift buying processes online.
Interest costs
– Compare to the competition, Hat Red 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support | 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Hat Red 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.
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. Hat Red can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hat Red 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.
Building a culture of innovation
– managers at Hat Red 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.
Developing new processes and practices
– Hat Red 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hat Red can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hat Red 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, Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support, 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, Hat Red is facing challenges because of the dominance of functional experts in the organization. Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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.
Better consumer reach
– The expansion of the 5G network will help Hat Red to increase its market reach. Hat Red 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
– Hat Red can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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.
Manufacturing automation
– Hat Red 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hat Red can use these opportunities to build new business models that can help the communities that Hat Red operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Loyalty marketing
– Hat Red 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.
Threats Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support are -
Regulatory challenges
– Hat Red 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.
Environmental challenges
– Hat Red 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. Hat Red can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Consumer confidence and its impact on Hat Red 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.
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 Hat Red.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hat Red with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Hat Red needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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. Hat Red can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Hat Red
– 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 Hat Red.
High dependence on third party suppliers
– Hat Red 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.
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 Hat Red business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hat Red 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support .
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. Hat Red 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.
Weighted SWOT Analysis of Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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 Hat Red needs to make to build a sustainable competitive advantage.
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