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 - – talent flight as more people leaving formal jobs, wage bills are increasing, increasing household debt because of falling income levels, geopolitical disruptions, 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%, there is backlash against globalization,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, 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 -
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.
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.
Successful track record of launching new products
– Hat Red has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hat Red has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
Innovation driven organization
– Hat Red is one of the most innovative firm in sector. Manager in Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Hat Red 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 Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Hat Red has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support 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.
Ability to recruit top talent
– Hat Red is one of the leading recruiters in the industry. Managers in the Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Hat Red has relatively successful track record of launching new products.
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.
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.
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.
Lack of clear differentiation of Hat Red products
– To increase the profitability and margins on the products, Hat Red 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 Hat Red, firm in the HBR case study Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Hat Red 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support, it seems that the employees of Hat Red 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.
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.
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.
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.
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 -
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.
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.
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.
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. Hat Red can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Hat Red in the consumer business. Now Hat Red can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Hat Red to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
Leveraging digital technologies
– Hat Red 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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hat Red 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 Hat Red to hire the very best people irrespective of their geographical location.
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 -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Red Hat Global Support Services: The Move to Relationship-based Customer Servicing and Knowledge-centered Support, Hat Red 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 .
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Hat Red has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Hat Red 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.
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 .
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.
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.
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.
Stagnating economy with rate increase
– Hat Red 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 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.
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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