Case Study Description of AGENCY.COM (B): Managing Rapid Growth
AGENCY.COM continues on its path of rapid growth, emerging as a leading interactive consulting firm. Its growth leads to new challenges related to the integration of diverse operations and the financing of future growth.
Authors :: Thomas J. DeLong, Ashish Nanda, Scot Landry
Swot Analysis of "AGENCY.COM (B): Managing Rapid Growth" written by Thomas J. DeLong, Ashish Nanda, Scot Landry includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Agency.com Growth facing as an external strategic factors. Some of the topics covered in AGENCY.COM (B): Managing Rapid Growth case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Internet and Technology & Operations.
Some of the macro environment factors that can be used to understand the AGENCY.COM (B): Managing Rapid Growth casestudy better are - – increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, wage bills are increasing, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
technology disruption, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of AGENCY.COM (B): Managing Rapid Growth
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AGENCY.COM (B): Managing Rapid Growth case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Agency.com Growth, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Agency.com Growth 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 AGENCY.COM (B): Managing Rapid Growth can be done for the following purposes –
1. Strategic planning using facts provided in AGENCY.COM (B): Managing Rapid Growth case study
2. Improving business portfolio management of Agency.com Growth
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 Agency.com Growth
Strengths AGENCY.COM (B): Managing Rapid Growth | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Agency.com Growth in AGENCY.COM (B): Managing Rapid Growth Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Agency.com Growth 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 Agency.com Growth in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Agency.com Growth has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Agency.com Growth to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Agency.com Growth is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Agency.com Growth is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AGENCY.COM (B): Managing Rapid Growth Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Agency.com Growth in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Agency.com Growth in the sector have low bargaining power. AGENCY.COM (B): Managing Rapid Growth has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Agency.com Growth to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Agency.com Growth
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Agency.com Growth does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Agency.com Growth has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AGENCY.COM (B): Managing Rapid Growth 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.
Strong track record of project management
– Agency.com Growth is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Agency.com Growth 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 Thomas J. DeLong, Ashish Nanda, Scot Landry can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Agency.com Growth is one of the leading recruiters in the industry. Managers in the AGENCY.COM (B): Managing Rapid Growth are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Agency.com Growth 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.
Sustainable margins compare to other players in Technology & Operations industry
– AGENCY.COM (B): Managing Rapid Growth firm has clearly differentiated products in the market place. This has enabled Agency.com Growth to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Agency.com Growth to invest into research and development (R&D) and innovation.
Weaknesses AGENCY.COM (B): Managing Rapid Growth | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AGENCY.COM (B): Managing Rapid Growth are -
Slow to strategic competitive environment developments
– As AGENCY.COM (B): Managing Rapid Growth HBR case study mentions - Agency.com Growth takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AGENCY.COM (B): Managing Rapid Growth 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 Agency.com Growth has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Agency.com Growth 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.
Aligning sales with marketing
– It come across in the case study AGENCY.COM (B): Managing Rapid Growth 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 AGENCY.COM (B): Managing Rapid Growth can leverage the sales team experience to cultivate customer relationships as Agency.com Growth is planning to shift buying processes online.
High cash cycle compare to competitors
Agency.com Growth 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.
High operating costs
– Compare to the competitors, firm in the HBR case study AGENCY.COM (B): Managing Rapid Growth 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 Agency.com Growth 's lucrative customers.
Products dominated business model
– Even though Agency.com Growth 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 - AGENCY.COM (B): Managing Rapid Growth should strive to include more intangible value offerings along with its core products and services.
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 Agency.com Growth supply chain. Even after few cautionary changes mentioned in the HBR case study - AGENCY.COM (B): Managing Rapid Growth, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Agency.com Growth vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study AGENCY.COM (B): Managing Rapid Growth, is just above the industry average. Agency.com Growth 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 AGENCY.COM (B): Managing Rapid Growth, in the dynamic environment Agency.com Growth has struggled to respond to the nimble upstart competition. Agency.com Growth has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AGENCY.COM (B): Managing Rapid Growth, it seems that the employees of Agency.com Growth 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.
Opportunities AGENCY.COM (B): Managing Rapid Growth | 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 AGENCY.COM (B): Managing Rapid Growth are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Agency.com Growth 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.
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 Agency.com Growth in the consumer business. Now Agency.com Growth can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Agency.com Growth to increase its market reach. Agency.com Growth 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Agency.com Growth 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 Agency.com Growth 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.
Buying journey improvements
– Agency.com Growth can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AGENCY.COM (B): Managing Rapid Growth 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.
Loyalty marketing
– Agency.com Growth 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.
Leveraging digital technologies
– Agency.com Growth 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
– Agency.com Growth 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.
Using analytics as competitive advantage
– Agency.com Growth has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study AGENCY.COM (B): Managing Rapid Growth - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Agency.com Growth to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Agency.com Growth can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Agency.com Growth can use these opportunities to build new business models that can help the communities that Agency.com Growth operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Manufacturing automation
– Agency.com Growth 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 AGENCY.COM (B): Managing Rapid Growth External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AGENCY.COM (B): Managing Rapid Growth are -
Regulatory challenges
– Agency.com Growth 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.
Shortening product life cycle
– it is one of the major threat that Agency.com Growth is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Agency.com Growth 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. Agency.com Growth needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Environmental challenges
– Agency.com Growth 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. Agency.com Growth can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
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.
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. Agency.com Growth can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Agency.com Growth 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.
Technology acceleration in Forth Industrial Revolution
– Agency.com Growth has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Agency.com Growth 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.
Consumer confidence and its impact on Agency.com Growth 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 Agency.com Growth in the Technology & Operations sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Agency.com Growth 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 AGENCY.COM (B): Managing Rapid Growth .
Weighted SWOT Analysis of AGENCY.COM (B): Managing Rapid Growth 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 AGENCY.COM (B): Managing Rapid Growth 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 AGENCY.COM (B): Managing Rapid Growth 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 AGENCY.COM (B): Managing Rapid Growth 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 AGENCY.COM (B): Managing Rapid Growth 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 Agency.com Growth needs to make to build a sustainable competitive advantage.
