Case Study Description of Electronic Commerce: Trends and Opportunities
In a 1966 Harvard Business Review article, Felix Kaufman implored general managers to think beyond their own organizational boundaries to the possibilities of interorganizational systems (IOS)--networked computers that enable companies to share information and information processing across organizational boundaries. His was a visionary argument that was already becoming a reality; from entrepreneurial actions at American Hospital Supply Corp. and American Airlines grew two legendary strategic IT applications that changed the face of their respective industries. In doing so, they helped change the role of IT so that it became a tool to support commerce--the organizational strategies, structures, and systems through which an organization conducts business with buyers, sellers, and other industry participants. Today, many of the most dramatic and potentially powerful uses of IT involve networks that transcend company boundaries. These IOS enable firms to incorporate buyers, suppliers, and partners in the redesign of their key business processes, thereby enhancing productivity, quality, speed, and flexibility.
Swot Analysis of "Electronic Commerce: Trends and Opportunities" written by Lynda M. Applegate, Janis L. Gogan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Boundaries Ios facing as an external strategic factors. Some of the topics covered in Electronic Commerce: Trends and Opportunities case study are - Strategic Management Strategies, Marketing, Organizational structure and Technology & Operations.
Some of the macro environment factors that can be used to understand the Electronic Commerce: Trends and Opportunities casestudy better are - – central banks are concerned over increasing inflation, technology disruption, increasing energy prices, cloud computing is disrupting traditional business models, wage bills are increasing, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Electronic Commerce: Trends and Opportunities
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Electronic Commerce: Trends and Opportunities case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Boundaries Ios, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Boundaries Ios 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 Electronic Commerce: Trends and Opportunities can be done for the following purposes –
1. Strategic planning using facts provided in Electronic Commerce: Trends and Opportunities case study
2. Improving business portfolio management of Boundaries Ios
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 Boundaries Ios
Strengths Electronic Commerce: Trends and Opportunities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Boundaries Ios in Electronic Commerce: Trends and Opportunities Harvard Business Review case study are -
Analytics focus
– Boundaries Ios 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 Lynda M. Applegate, Janis L. Gogan 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
– Boundaries Ios has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Boundaries Ios 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.
Strong track record of project management
– Boundaries Ios is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Boundaries Ios digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Boundaries Ios 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.
Innovation driven organization
– Boundaries Ios is one of the most innovative firm in sector. Manager in Electronic Commerce: Trends and Opportunities Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Boundaries Ios 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 Boundaries Ios in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Technology & Operations field
– Boundaries Ios 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 Boundaries Ios in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Boundaries Ios 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 Electronic Commerce: Trends and Opportunities - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Technology & Operations industry
– Electronic Commerce: Trends and Opportunities firm has clearly differentiated products in the market place. This has enabled Boundaries Ios to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Boundaries Ios to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Boundaries Ios 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 Electronic Commerce: Trends and Opportunities HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Electronic Commerce: Trends and Opportunities Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Electronic Commerce: Trends and Opportunities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Electronic Commerce: Trends and Opportunities are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Electronic Commerce: Trends and Opportunities, is just above the industry average. Boundaries Ios 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, Boundaries Ios 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Electronic Commerce: Trends and Opportunities 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 Boundaries Ios has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Electronic Commerce: Trends and Opportunities 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 Electronic Commerce: Trends and Opportunities can leverage the sales team experience to cultivate customer relationships as Boundaries Ios is planning to shift buying processes online.
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 Boundaries Ios supply chain. Even after few cautionary changes mentioned in the HBR case study - Electronic Commerce: Trends and Opportunities, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Boundaries Ios vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Boundaries Ios, firm in the HBR case study Electronic Commerce: Trends and Opportunities needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Boundaries Ios 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. Boundaries Ios 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.
Interest costs
– Compare to the competition, Boundaries Ios 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.
Need for greater diversity
– Boundaries Ios has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Products dominated business model
– Even though Boundaries Ios 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 - Electronic Commerce: Trends and Opportunities should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Electronic Commerce: Trends and Opportunities, in the dynamic environment Boundaries Ios has struggled to respond to the nimble upstart competition. Boundaries Ios has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Electronic Commerce: Trends and Opportunities | 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 Electronic Commerce: Trends and Opportunities are -
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 Boundaries Ios in the consumer business. Now Boundaries Ios can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Boundaries Ios 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Boundaries Ios 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 Boundaries Ios 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, Boundaries Ios 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
– Boundaries Ios 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.
Using analytics as competitive advantage
– Boundaries Ios 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 Electronic Commerce: Trends and Opportunities - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Boundaries Ios to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Boundaries Ios can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Boundaries Ios can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Boundaries Ios 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, Electronic Commerce: Trends and Opportunities, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Boundaries Ios to increase its market reach. Boundaries Ios 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.
Leveraging digital technologies
– Boundaries Ios 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Boundaries Ios can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Boundaries Ios 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Boundaries Ios to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Electronic Commerce: Trends and Opportunities External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Electronic Commerce: Trends and Opportunities are -
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. Boundaries Ios can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Boundaries Ios needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
Consumer confidence and its impact on Boundaries Ios 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Boundaries Ios 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 Electronic Commerce: Trends and Opportunities .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Boundaries Ios in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Boundaries Ios in the Technology & Operations sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Boundaries Ios with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Boundaries Ios high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Boundaries Ios business can come under increasing regulations regarding data privacy, data security, etc.
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.
Shortening product life cycle
– it is one of the major threat that Boundaries Ios is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Electronic Commerce: Trends and Opportunities, Boundaries Ios 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 .
Weighted SWOT Analysis of Electronic Commerce: Trends and Opportunities 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 Electronic Commerce: Trends and Opportunities 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 Electronic Commerce: Trends and Opportunities 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 Electronic Commerce: Trends and Opportunities 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 Electronic Commerce: Trends and Opportunities 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 Boundaries Ios needs to make to build a sustainable competitive advantage.