Fotolia N.A.: Acting like a Start-Up in a Mature Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Fotolia N.A.: Acting like a Start-Up in a Mature Industry
The microstock photography industry took shape in the early 2000s, when iStockphoto commercialized its online catalogue of images contributed by a community of amateur and semi-professional photographers. This case takes place about four years after iStockphoto's purchase by Getty Images, an event that signalled a shift of market dominance from traditional stock photo houses to their microstock competitors. The industry has changed dramatically. Three firms - iStockphoto, Shutterstock and Fotolia LLC - control the lion's share of a mature market, and each dominates a particular segment. The Fotolia management team must find ways to grow Fotolia N.A., even as competitors also seek to exploit the "long tail" in the market. The case asks students to develop strategies to generate new revenue in this rapidly changing environment.
Swot Analysis of "Fotolia N.A.: Acting like a Start-Up in a Mature Industry" written by Rebecca A. Grant, David M. McCutcheon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fotolia Istockphoto facing as an external strategic factors. Some of the topics covered in Fotolia N.A.: Acting like a Start-Up in a Mature Industry case study are - Strategic Management Strategies, Marketing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Fotolia N.A.: Acting like a Start-Up in a Mature Industry casestudy better are - – increasing transportation and logistics costs, there is backlash against globalization, increasing energy prices, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Fotolia N.A.: Acting like a Start-Up in a Mature Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fotolia N.A.: Acting like a Start-Up in a Mature Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fotolia Istockphoto, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fotolia Istockphoto 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 Fotolia N.A.: Acting like a Start-Up in a Mature Industry can be done for the following purposes –
1. Strategic planning using facts provided in Fotolia N.A.: Acting like a Start-Up in a Mature Industry case study
2. Improving business portfolio management of Fotolia Istockphoto
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 Fotolia Istockphoto
Strengths Fotolia N.A.: Acting like a Start-Up in a Mature Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fotolia Istockphoto in Fotolia N.A.: Acting like a Start-Up in a Mature Industry Harvard Business Review case study are -
Ability to recruit top talent
– Fotolia Istockphoto is one of the leading recruiters in the industry. Managers in the Fotolia N.A.: Acting like a Start-Up in a Mature Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Fotolia Istockphoto is one of the most innovative firm in sector. Manager in Fotolia N.A.: Acting like a Start-Up in a Mature Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Fotolia Istockphoto 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 Rebecca A. Grant, David M. McCutcheon 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.
Learning organization
- Fotolia Istockphoto 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 Fotolia Istockphoto is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Fotolia N.A.: Acting like a Start-Up in a Mature Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Fotolia Istockphoto 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.
Strong track record of project management
– Fotolia Istockphoto is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Technology & Operations industry
– Fotolia N.A.: Acting like a Start-Up in a Mature Industry firm has clearly differentiated products in the market place. This has enabled Fotolia Istockphoto to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Fotolia Istockphoto to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Fotolia Istockphoto is present in almost all the verticals within the industry. This has provided firm in Fotolia N.A.: Acting like a Start-Up in a Mature Industry 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
– Fotolia Istockphoto has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fotolia Istockphoto 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Fotolia Istockphoto digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fotolia Istockphoto 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 brand equity
– Fotolia Istockphoto has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fotolia Istockphoto to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Fotolia Istockphoto 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 Fotolia N.A.: Acting like a Start-Up in a Mature Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Fotolia N.A.: Acting like a Start-Up in a Mature Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fotolia N.A.: Acting like a Start-Up in a Mature Industry are -
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 Fotolia Istockphoto supply chain. Even after few cautionary changes mentioned in the HBR case study - Fotolia N.A.: Acting like a Start-Up in a Mature Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fotolia Istockphoto vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Fotolia Istockphoto 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.
Need for greater diversity
– Fotolia Istockphoto 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.
Increasing silos among functional specialists
– The organizational structure of Fotolia Istockphoto is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Fotolia Istockphoto needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fotolia Istockphoto to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Rebecca A. Grant, David M. McCutcheon suggests that, Fotolia Istockphoto 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Fotolia N.A.: Acting like a Start-Up in a Mature Industry 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 Fotolia Istockphoto 's lucrative customers.
Slow to strategic competitive environment developments
– As Fotolia N.A.: Acting like a Start-Up in a Mature Industry HBR case study mentions - Fotolia Istockphoto 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fotolia Istockphoto is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Fotolia N.A.: Acting like a Start-Up in a Mature Industry 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 decision making process
– As mentioned earlier in the report, Fotolia Istockphoto 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. Fotolia Istockphoto 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.
Capital Spending Reduction
– Even during the low interest decade, Fotolia Istockphoto 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.
No frontier risks strategy
– After analyzing the HBR case study Fotolia N.A.: Acting like a Start-Up in a Mature Industry, 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.
Opportunities Fotolia N.A.: Acting like a Start-Up in a Mature Industry | 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 Fotolia N.A.: Acting like a Start-Up in a Mature Industry are -
Learning at scale
– Online learning technologies has now opened space for Fotolia Istockphoto 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fotolia Istockphoto is facing challenges because of the dominance of functional experts in the organization. Fotolia N.A.: Acting like a Start-Up in a Mature Industry 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.
Leveraging digital technologies
– Fotolia Istockphoto 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.
Better consumer reach
– The expansion of the 5G network will help Fotolia Istockphoto to increase its market reach. Fotolia Istockphoto 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.
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 Fotolia Istockphoto in the consumer business. Now Fotolia Istockphoto 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 Fotolia Istockphoto 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 Fotolia Istockphoto to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Fotolia Istockphoto 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 Fotolia N.A.: Acting like a Start-Up in a Mature Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fotolia Istockphoto to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Fotolia Istockphoto has opened avenues for new revenue streams for the organization in the industry. This can help Fotolia Istockphoto to build a more holistic ecosystem as suggested in the Fotolia N.A.: Acting like a Start-Up in a Mature Industry case study. Fotolia Istockphoto can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Fotolia Istockphoto 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fotolia Istockphoto can use these opportunities to build new business models that can help the communities that Fotolia Istockphoto operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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. Fotolia Istockphoto can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fotolia Istockphoto can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fotolia Istockphoto in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Threats Fotolia N.A.: Acting like a Start-Up in a Mature Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fotolia N.A.: Acting like a Start-Up in a Mature Industry are -
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.
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. Fotolia Istockphoto can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Fotolia Istockphoto 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 Fotolia Istockphoto.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Fotolia N.A.: Acting like a Start-Up in a Mature Industry, Fotolia Istockphoto 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 .
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 Fotolia Istockphoto business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Fotolia Istockphoto 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.
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. Fotolia Istockphoto needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Fotolia Istockphoto 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.
Increasing wage structure of Fotolia Istockphoto
– 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 Fotolia Istockphoto.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fotolia Istockphoto with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Stagnating economy with rate increase
– Fotolia Istockphoto 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.
Weighted SWOT Analysis of Fotolia N.A.: Acting like a Start-Up in a Mature Industry 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 Fotolia N.A.: Acting like a Start-Up in a Mature Industry 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 Fotolia N.A.: Acting like a Start-Up in a Mature Industry 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 Fotolia N.A.: Acting like a Start-Up in a Mature Industry 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 Fotolia N.A.: Acting like a Start-Up in a Mature Industry 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 Fotolia Istockphoto needs to make to build a sustainable competitive advantage.