Case Study Description of Price or Relationship: SecureNow's Dilemma
In April 2014, the founder of SecureNow met with one of his classmates who was now an angel investor. The two had recently met socially and the founder had briefed his classmate on SecureNow's online business-to-business insurance marketplace. The classmate was now expressing interest in investing in SecureNow but his valuation was much lower than the founder's expectation. The founder was confident of SecureNow's future growth, but he wanted funds to expand. His classmate would provide him with the kind of relationship he was seeking with an investor, but the founder wondered how he and his classmate arrived at such different valuations. He also wondered whether he should accept the funds at a low valuation, consider other options, or just postpone his expansion plans. Ripsy Bondia is affiliated with Management Development Institute. Ashutosh Dash is affiliated with Management Development Institute.
Swot Analysis of "Price or Relationship: SecureNow's Dilemma" written by Ripsy Bondia, Ashutosh Dash includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Classmate Securenow's facing as an external strategic factors. Some of the topics covered in Price or Relationship: SecureNow's Dilemma case study are - Strategic Management Strategies, Entrepreneurship, Financial analysis and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Price or Relationship: SecureNow's Dilemma casestudy better are - – central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is increasing trade war between United States & China,
increasing energy prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Price or Relationship: SecureNow's Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Price or Relationship: SecureNow's Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Classmate Securenow's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Classmate Securenow's 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 Price or Relationship: SecureNow's Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in Price or Relationship: SecureNow's Dilemma case study
2. Improving business portfolio management of Classmate Securenow's
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Classmate Securenow's
Strengths Price or Relationship: SecureNow's Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Classmate Securenow's in Price or Relationship: SecureNow's Dilemma Harvard Business Review case study are -
Successful track record of launching new products
– Classmate Securenow's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Classmate Securenow's 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.
Innovation driven organization
– Classmate Securenow's is one of the most innovative firm in sector. Manager in Price or Relationship: SecureNow's Dilemma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Classmate Securenow's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Classmate Securenow's 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.
Operational resilience
– The operational resilience strategy in the Price or Relationship: SecureNow's Dilemma 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.
Strong track record of project management
– Classmate Securenow's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Classmate Securenow's 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 Classmate Securenow's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Price or Relationship: SecureNow's Dilemma Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Classmate Securenow's 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 Ripsy Bondia, Ashutosh Dash 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.
Organizational Resilience of Classmate Securenow's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Classmate Securenow's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Classmate Securenow's 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.
Superior customer experience
– The customer experience strategy of Classmate Securenow's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Finance & Accounting field
– Classmate Securenow's 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 Classmate Securenow's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Classmate Securenow's in the sector have low bargaining power. Price or Relationship: SecureNow's Dilemma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Classmate Securenow's to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Price or Relationship: SecureNow's Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Price or Relationship: SecureNow's Dilemma are -
Lack of clear differentiation of Classmate Securenow's products
– To increase the profitability and margins on the products, Classmate Securenow's needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Classmate Securenow's, firm in the HBR case study Price or Relationship: SecureNow's Dilemma needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Classmate Securenow's supply chain. Even after few cautionary changes mentioned in the HBR case study - Price or Relationship: SecureNow's Dilemma, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Classmate Securenow's vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Classmate Securenow's is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Classmate Securenow's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Classmate Securenow's to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Classmate Securenow's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Classmate Securenow's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Price or Relationship: SecureNow's Dilemma can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Classmate Securenow's 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.
Interest costs
– Compare to the competition, Classmate Securenow's 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 Classmate Securenow's 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 - Price or Relationship: SecureNow's Dilemma should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Price or Relationship: SecureNow's Dilemma, it seems that the employees of Classmate Securenow's 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.
Slow to strategic competitive environment developments
– As Price or Relationship: SecureNow's Dilemma HBR case study mentions - Classmate Securenow's 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.
Opportunities Price or Relationship: SecureNow's Dilemma | 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 Price or Relationship: SecureNow's Dilemma are -
Developing new processes and practices
– Classmate Securenow's can develop new processes and procedures in Finance & Accounting 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, Classmate Securenow's 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, Price or Relationship: SecureNow's Dilemma, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Classmate Securenow's 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.
Creating value in data economy
– The success of analytics program of Classmate Securenow's has opened avenues for new revenue streams for the organization in the industry. This can help Classmate Securenow's to build a more holistic ecosystem as suggested in the Price or Relationship: SecureNow's Dilemma case study. Classmate Securenow's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Classmate Securenow's 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 Finance & Accounting segment.
Using analytics as competitive advantage
– Classmate Securenow's 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 Price or Relationship: SecureNow's Dilemma - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Classmate Securenow's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Classmate Securenow's to increase its market reach. Classmate Securenow's 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.
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 Classmate Securenow's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Classmate Securenow's is facing challenges because of the dominance of functional experts in the organization. Price or Relationship: SecureNow's Dilemma case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Classmate Securenow's can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Classmate Securenow's 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. Classmate Securenow's 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Classmate Securenow's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Classmate Securenow's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Threats Price or Relationship: SecureNow's Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Price or Relationship: SecureNow's Dilemma are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Classmate Securenow's in the Finance & Accounting industry. The Finance & Accounting 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.
Increasing wage structure of Classmate Securenow's
– 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 Classmate Securenow's.
Regulatory challenges
– Classmate Securenow's 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 Finance & Accounting industry regulations.
Environmental challenges
– Classmate Securenow's 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. Classmate Securenow's can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Consumer confidence and its impact on Classmate Securenow's 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.
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 Classmate Securenow's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Classmate Securenow's 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 Price or Relationship: SecureNow's Dilemma .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Classmate Securenow's 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 Price or Relationship: SecureNow's Dilemma, Classmate Securenow's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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. Classmate Securenow's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Classmate Securenow's business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Classmate Securenow's 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.
Weighted SWOT Analysis of Price or Relationship: SecureNow's Dilemma 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 Price or Relationship: SecureNow's Dilemma 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 Price or Relationship: SecureNow's Dilemma 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 Price or Relationship: SecureNow's Dilemma 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 Price or Relationship: SecureNow's Dilemma 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 Classmate Securenow's needs to make to build a sustainable competitive advantage.