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 - – increasing commodity prices, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs,
wage bills are increasing, increasing energy prices, 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 -
Training and development
– Classmate Securenow's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Price or Relationship: SecureNow's Dilemma 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Price or Relationship: SecureNow's Dilemma firm has clearly differentiated products in the market place. This has enabled Classmate Securenow's to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Classmate Securenow's to invest into research and development (R&D) and innovation.
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.
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.
Ability to recruit top talent
– Classmate Securenow's is one of the leading recruiters in the industry. Managers in the Price or Relationship: SecureNow's Dilemma are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
High brand equity
– Classmate Securenow's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Classmate Securenow's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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 -
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 decision making process
– As mentioned earlier in the report, Classmate Securenow's 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. Classmate Securenow's 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.
Need for greater diversity
– Classmate Securenow's 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.
Aligning sales with marketing
– It come across in the case study Price or Relationship: SecureNow's Dilemma 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 Price or Relationship: SecureNow's Dilemma can leverage the sales team experience to cultivate customer relationships as Classmate Securenow's is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Price or Relationship: SecureNow's Dilemma 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 Classmate Securenow's 's lucrative customers.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Price or Relationship: SecureNow's Dilemma 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 Classmate Securenow's has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Ripsy Bondia, Ashutosh Dash suggests that, Classmate Securenow's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Price or Relationship: SecureNow's Dilemma, is just above the industry average. Classmate Securenow's 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.
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Classmate Securenow's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Classmate Securenow's can use these opportunities to build new business models that can help the communities that Classmate Securenow's operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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.
Learning at scale
– Online learning technologies has now opened space for Classmate Securenow's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Classmate Securenow's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Buying journey improvements
– Classmate Securenow's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Price or Relationship: SecureNow's Dilemma 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.
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.
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.
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.
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 Classmate Securenow's in the consumer business. Now Classmate Securenow's can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Classmate Securenow's is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Classmate Securenow's needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 .
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 Classmate Securenow's in the Finance & Accounting sector and impact the bottomline of the organization.
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.
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.
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.
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.
Stagnating economy with rate increase
– Classmate Securenow's 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.
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 .
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.