Terra Lycos: Creating a Global and Profitable Integrated Media Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Terra Lycos: Creating a Global and Profitable Integrated Media Company
This case recounts the strategy of Terra Lycos, an integrated global media company formed by the October 2000 merger of Spain's Terra Networks and US-based Lycos, to achieve profitability and a leading market position. At the time the case was written (November 2001), Terra Lycos trailed its three heavyweight contenders, AOL-Time Warner, Yahoo! and Microsoft/MSN.
Swot Analysis of "Terra Lycos: Creating a Global and Profitable Integrated Media Company" written by Soumitra Dutta, Theodoros Theos Evgeniou, Patricia Reese includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lycos Terra facing as an external strategic factors. Some of the topics covered in Terra Lycos: Creating a Global and Profitable Integrated Media Company case study are - Strategic Management Strategies, Economy, Globalization, IT and Technology & Operations.
Some of the macro environment factors that can be used to understand the Terra Lycos: Creating a Global and Profitable Integrated Media Company casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing commodity prices, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Terra Lycos: Creating a Global and Profitable Integrated Media Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Terra Lycos: Creating a Global and Profitable Integrated Media Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lycos Terra, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lycos Terra 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 Terra Lycos: Creating a Global and Profitable Integrated Media Company can be done for the following purposes –
1. Strategic planning using facts provided in Terra Lycos: Creating a Global and Profitable Integrated Media Company case study
2. Improving business portfolio management of Lycos Terra
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 Lycos Terra
Strengths Terra Lycos: Creating a Global and Profitable Integrated Media Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lycos Terra in Terra Lycos: Creating a Global and Profitable Integrated Media Company Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Lycos Terra in the sector have low bargaining power. Terra Lycos: Creating a Global and Profitable Integrated Media Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lycos Terra to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Technology & Operations industry
– Terra Lycos: Creating a Global and Profitable Integrated Media Company firm has clearly differentiated products in the market place. This has enabled Lycos Terra to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Lycos Terra to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Lycos Terra 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Lycos Terra digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lycos Terra 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.
High switching costs
– The high switching costs that Lycos Terra 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.
Superior customer experience
– The customer experience strategy of Lycos Terra in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Lycos Terra is present in almost all the verticals within the industry. This has provided firm in Terra Lycos: Creating a Global and Profitable Integrated Media Company 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
– Lycos Terra has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lycos Terra 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.
Highly skilled collaborators
– Lycos Terra 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 Terra Lycos: Creating a Global and Profitable Integrated Media Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Lycos Terra is one of the most innovative firm in sector. Manager in Terra Lycos: Creating a Global and Profitable Integrated Media Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Lycos Terra 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 Lycos Terra is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Terra Lycos: Creating a Global and Profitable Integrated Media Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Lycos Terra is one of the leading recruiters in the industry. Managers in the Terra Lycos: Creating a Global and Profitable Integrated Media Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Terra Lycos: Creating a Global and Profitable Integrated Media Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Terra Lycos: Creating a Global and Profitable Integrated Media Company are -
Aligning sales with marketing
– It come across in the case study Terra Lycos: Creating a Global and Profitable Integrated Media Company 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 Terra Lycos: Creating a Global and Profitable Integrated Media Company can leverage the sales team experience to cultivate customer relationships as Lycos Terra is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Terra Lycos: Creating a Global and Profitable Integrated Media Company 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 Lycos Terra 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Terra Lycos: Creating a Global and Profitable Integrated Media Company, 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.
Skills based hiring
– The stress on hiring functional specialists at Lycos Terra 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Terra Lycos: Creating a Global and Profitable Integrated Media Company, is just above the industry average. Lycos Terra 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Lycos Terra 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.
High cash cycle compare to competitors
Lycos Terra 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.
Interest costs
– Compare to the competition, Lycos Terra 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lycos Terra is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Terra Lycos: Creating a Global and Profitable Integrated Media Company can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Terra Lycos: Creating a Global and Profitable Integrated Media Company HBR case study mentions - Lycos Terra 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.
Products dominated business model
– Even though Lycos Terra 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 - Terra Lycos: Creating a Global and Profitable Integrated Media Company should strive to include more intangible value offerings along with its core products and services.
Opportunities Terra Lycos: Creating a Global and Profitable Integrated Media Company | 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 Terra Lycos: Creating a Global and Profitable Integrated Media Company are -
Learning at scale
– Online learning technologies has now opened space for Lycos Terra 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.
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 Lycos Terra in the consumer business. Now Lycos Terra can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lycos Terra 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 Lycos Terra to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Lycos Terra 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.
Developing new processes and practices
– Lycos Terra 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lycos Terra 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, Terra Lycos: Creating a Global and Profitable Integrated Media Company, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Lycos Terra 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 Lycos Terra in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Loyalty marketing
– Lycos Terra 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.
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. Lycos Terra can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Lycos Terra to increase its market reach. Lycos Terra 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lycos Terra can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Lycos Terra can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Terra Lycos: Creating a Global and Profitable Integrated Media Company 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.
Threats Terra Lycos: Creating a Global and Profitable Integrated Media Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Terra Lycos: Creating a Global and Profitable Integrated Media Company are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lycos Terra with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Terra Lycos: Creating a Global and Profitable Integrated Media Company, Lycos Terra 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 .
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 Lycos Terra 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, Lycos Terra 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 Terra Lycos: Creating a Global and Profitable Integrated Media Company .
Increasing wage structure of Lycos Terra
– 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 Lycos Terra.
Technology acceleration in Forth Industrial Revolution
– Lycos Terra has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Lycos Terra 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.
High dependence on third party suppliers
– Lycos Terra 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.
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.
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. Lycos Terra needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Consumer confidence and its impact on Lycos Terra 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.
Regulatory challenges
– Lycos Terra 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.
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.
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. Lycos Terra can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Terra Lycos: Creating a Global and Profitable Integrated Media Company 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 Terra Lycos: Creating a Global and Profitable Integrated Media Company 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 Terra Lycos: Creating a Global and Profitable Integrated Media Company 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 Terra Lycos: Creating a Global and Profitable Integrated Media Company 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 Terra Lycos: Creating a Global and Profitable Integrated Media Company 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 Lycos Terra needs to make to build a sustainable competitive advantage.
