The Global Software Industry in 2007 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Global Software Industry in 2007
This research note provides a snapshot of the global software industry as it undergoes a major transition in 2007. McKinsey's annual survey shows that software's share of the IT budget in 2007 is around 31.3%-up from 29.6% in 2006-and is expected to reach 36% in 2009. Internal and external funding have provided an unparalleled fertile ground for software innovation. Software development has become commodities and customer-driven, and is evolving to wards services. These service-oriented architectures allow users to focus on business logic and functions rather than the underlying IT infrastructure. New business models, like software-as-a-service, have given customers the option to pay based on their actual use of software rather than facing the high initial costs and technical complexity of buying and installing software. Also, with Web 2.0 applications, the web has become a platform for people to share and socialize. Along with off shoring and open source, all these changes are challenging the traditional licensing model of the software industry.
Swot Analysis of "The Global Software Industry in 2007" written by Minyi Huang, Ali Farhoomand includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Software 2007 facing as an external strategic factors. Some of the topics covered in The Global Software Industry in 2007 case study are - Strategic Management Strategies, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the The Global Software Industry in 2007 casestudy better are - – increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of The Global Software Industry in 2007
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Global Software Industry in 2007 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Software 2007, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Software 2007 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 The Global Software Industry in 2007 can be done for the following purposes –
1. Strategic planning using facts provided in The Global Software Industry in 2007 case study
2. Improving business portfolio management of Software 2007
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 Software 2007
Strengths The Global Software Industry in 2007 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Software 2007 in The Global Software Industry in 2007 Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Software 2007 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 Software 2007 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
– Software 2007 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
– Software 2007 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 Minyi Huang, Ali Farhoomand 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.
Successful track record of launching new products
– Software 2007 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Software 2007 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.
High brand equity
– Software 2007 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Software 2007 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Software 2007 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Global Software Industry in 2007 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.
Superior customer experience
– The customer experience strategy of Software 2007 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 Software 2007 in the sector have low bargaining power. The Global Software Industry in 2007 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Software 2007 to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Technology & Operations industry
– The Global Software Industry in 2007 firm has clearly differentiated products in the market place. This has enabled Software 2007 to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Software 2007 to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Software 2007 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 The Global Software Industry in 2007 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Software 2007 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.
Learning organization
- Software 2007 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 Software 2007 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Global Software Industry in 2007 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses The Global Software Industry in 2007 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Global Software Industry in 2007 are -
Lack of clear differentiation of Software 2007 products
– To increase the profitability and margins on the products, Software 2007 needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study The Global Software Industry in 2007 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 The Global Software Industry in 2007 can leverage the sales team experience to cultivate customer relationships as Software 2007 is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Software 2007, firm in the HBR case study The Global Software Industry in 2007 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Software 2007 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, Software 2007 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. Software 2007 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 The Global Software Industry in 2007, is just above the industry average. Software 2007 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.
Increasing silos among functional specialists
– The organizational structure of Software 2007 is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Software 2007 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Software 2007 to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study The Global Software Industry in 2007 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 Software 2007 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Global Software Industry in 2007, it seems that the employees of Software 2007 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.
Interest costs
– Compare to the competition, Software 2007 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.
Products dominated business model
– Even though Software 2007 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 - The Global Software Industry in 2007 should strive to include more intangible value offerings along with its core products and services.
Opportunities The Global Software Industry in 2007 | 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 The Global Software Industry in 2007 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, Software 2007 can use these opportunities to build new business models that can help the communities that Software 2007 operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Software 2007 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, The Global Software Industry in 2007, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Software 2007 in the consumer business. Now Software 2007 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 Software 2007 to increase its market reach. Software 2007 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.
Creating value in data economy
– The success of analytics program of Software 2007 has opened avenues for new revenue streams for the organization in the industry. This can help Software 2007 to build a more holistic ecosystem as suggested in the The Global Software Industry in 2007 case study. Software 2007 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Software 2007 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.
Buying journey improvements
– Software 2007 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Global Software Industry in 2007 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Software 2007 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 Software 2007 to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Software 2007 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.
Manufacturing automation
– Software 2007 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.
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. Software 2007 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Software 2007 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 Software 2007 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.
Threats The Global Software Industry in 2007 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Global Software Industry in 2007 are -
Shortening product life cycle
– it is one of the major threat that Software 2007 is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Software 2007 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.
Stagnating economy with rate increase
– Software 2007 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.
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 Software 2007 in the Technology & Operations sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Software 2007 needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Software 2007.
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.
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 Software 2007 business can come under increasing regulations regarding data privacy, data security, etc.
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. Software 2007 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Software 2007 has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Software 2007 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, Software 2007 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 The Global Software Industry in 2007 .
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
– Software 2007 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. Software 2007 can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Weighted SWOT Analysis of The Global Software Industry in 2007 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 The Global Software Industry in 2007 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 The Global Software Industry in 2007 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 The Global Software Industry in 2007 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 The Global Software Industry in 2007 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 Software 2007 needs to make to build a sustainable competitive advantage.