The co-founders of Auctionwire, a start-up online business that will sell goods on consignment, are trying to select the best software solution for their fledging business. The co-founders want to know how they can make the best decision possible in vendor selection. What criteria should be used? Which questions should they ask? As software is the key component of their online operation, the choice of a vendor can spell success or failure for Auctionwire.
Swot Analysis of "Creating Auctionwire" written by Nicole R.D. Haggerty, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Auctionwire Vendor facing as an external strategic factors. Some of the topics covered in Creating Auctionwire case study are - Strategic Management Strategies, Strategic planning and Technology & Operations.
Some of the macro environment factors that can be used to understand the Creating Auctionwire casestudy better are - – there is increasing trade war between United States & China, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc
Introduction to SWOT Analysis of Creating Auctionwire
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Creating Auctionwire case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Auctionwire Vendor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Auctionwire Vendor 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 Creating Auctionwire can be done for the following purposes –
1. Strategic planning using facts provided in Creating Auctionwire case study
2. Improving business portfolio management of Auctionwire Vendor
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 Auctionwire Vendor
Strengths Creating Auctionwire | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Auctionwire Vendor in Creating Auctionwire Harvard Business Review case study are -
Successful track record of launching new products
– Auctionwire Vendor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Auctionwire Vendor 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.
Sustainable margins compare to other players in Technology & Operations industry
– Creating Auctionwire firm has clearly differentiated products in the market place. This has enabled Auctionwire Vendor to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Auctionwire Vendor to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Creating Auctionwire 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.
High brand equity
– Auctionwire Vendor has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Auctionwire Vendor to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Auctionwire Vendor in the sector have low bargaining power. Creating Auctionwire has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Auctionwire Vendor to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Auctionwire Vendor is one of the most innovative firm in sector. Manager in Creating Auctionwire Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Auctionwire Vendor is one of the leading recruiters in the industry. Managers in the Creating Auctionwire are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Auctionwire Vendor 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 Nicole R.D. Haggerty, Ken Mark 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.
Strong track record of project management
– Auctionwire Vendor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Auctionwire Vendor has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Creating Auctionwire 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.
Diverse revenue streams
– Auctionwire Vendor is present in almost all the verticals within the industry. This has provided firm in Creating Auctionwire 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.
High switching costs
– The high switching costs that Auctionwire Vendor 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.
Weaknesses Creating Auctionwire | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Creating Auctionwire are -
Workers concerns about automation
– As automation is fast increasing in the segment, Auctionwire Vendor 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 Creating Auctionwire 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 Auctionwire Vendor has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Auctionwire Vendor has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 Auctionwire Vendor supply chain. Even after few cautionary changes mentioned in the HBR case study - Creating Auctionwire, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Auctionwire Vendor vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Auctionwire Vendor 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. Auctionwire Vendor 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.
Lack of clear differentiation of Auctionwire Vendor products
– To increase the profitability and margins on the products, Auctionwire Vendor needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Nicole R.D. Haggerty, Ken Mark suggests that, Auctionwire Vendor 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.
Need for greater diversity
– Auctionwire Vendor 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.
Interest costs
– Compare to the competition, Auctionwire Vendor 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 Auctionwire Vendor 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 - Creating Auctionwire should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Creating Auctionwire HBR case study mentions - Auctionwire Vendor 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 Creating Auctionwire | 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 Creating Auctionwire are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Auctionwire Vendor 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. Auctionwire Vendor can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Auctionwire Vendor has opened avenues for new revenue streams for the organization in the industry. This can help Auctionwire Vendor to build a more holistic ecosystem as suggested in the Creating Auctionwire case study. Auctionwire Vendor can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Auctionwire Vendor is facing challenges because of the dominance of functional experts in the organization. Creating Auctionwire 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
– Auctionwire Vendor 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Auctionwire Vendor 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.
Learning at scale
– Online learning technologies has now opened space for Auctionwire Vendor 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.
Leveraging digital technologies
– Auctionwire Vendor 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.
Building a culture of innovation
– managers at Auctionwire Vendor can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Auctionwire Vendor 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, Creating Auctionwire, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Auctionwire Vendor can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Creating Auctionwire 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Auctionwire Vendor can use these opportunities to build new business models that can help the communities that Auctionwire Vendor operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Auctionwire Vendor 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.
Threats Creating Auctionwire External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Creating Auctionwire are -
Technology acceleration in Forth Industrial Revolution
– Auctionwire Vendor has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Auctionwire Vendor needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Auctionwire Vendor 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.
Environmental challenges
– Auctionwire Vendor 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. Auctionwire Vendor can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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. Auctionwire Vendor needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Auctionwire Vendor business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Auctionwire Vendor 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, Auctionwire Vendor 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 Creating Auctionwire .
High dependence on third party suppliers
– Auctionwire Vendor 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.
Shortening product life cycle
– it is one of the major threat that Auctionwire Vendor is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Creating Auctionwire, Auctionwire Vendor 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 .
Consumer confidence and its impact on Auctionwire Vendor 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.
Weighted SWOT Analysis of Creating Auctionwire 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 Creating Auctionwire 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 Creating Auctionwire 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 Creating Auctionwire 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 Creating Auctionwire 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 Auctionwire Vendor needs to make to build a sustainable competitive advantage.
