Hotbank: Softbank's New Business Model for Early Stage Venture Incubation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hotbank: Softbank's New Business Model for Early Stage Venture Incubation
This case is available in only hard copy format (HBP does not have digital distribution rights to the content). As a result, a digital Educator Copy of the case is not available through this web site.Softbank Venture Capital (SBVC) has established a business incubator, Hotbank. Ellen Levy, a "Netbatsu Development Officer" with SBVC, is faced with a decision about which relationships among Hotbank/SBVC portfolio companies to facilitate.
Authors :: Henry W. Chesbrough, Mary Teichert Rotelli
Swot Analysis of "Hotbank: Softbank's New Business Model for Early Stage Venture Incubation" written by Henry W. Chesbrough, Mary Teichert Rotelli includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hotbank Sbvc facing as an external strategic factors. Some of the topics covered in Hotbank: Softbank's New Business Model for Early Stage Venture Incubation case study are - Strategic Management Strategies, Internet, Networking, Venture capital and Technology & Operations.
Some of the macro environment factors that can be used to understand the Hotbank: Softbank's New Business Model for Early Stage Venture Incubation casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing transportation and logistics costs, central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Hotbank: Softbank's New Business Model for Early Stage Venture Incubation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hotbank: Softbank's New Business Model for Early Stage Venture Incubation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hotbank Sbvc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hotbank Sbvc 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 Hotbank: Softbank's New Business Model for Early Stage Venture Incubation can be done for the following purposes –
1. Strategic planning using facts provided in Hotbank: Softbank's New Business Model for Early Stage Venture Incubation case study
2. Improving business portfolio management of Hotbank Sbvc
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 Hotbank Sbvc
Strengths Hotbank: Softbank's New Business Model for Early Stage Venture Incubation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hotbank Sbvc in Hotbank: Softbank's New Business Model for Early Stage Venture Incubation Harvard Business Review case study are -
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Hotbank Sbvc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hotbank Sbvc 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.
Highly skilled collaborators
– Hotbank Sbvc 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 Hotbank: Softbank's New Business Model for Early Stage Venture Incubation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Hotbank Sbvc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Hotbank: Softbank's New Business Model for Early Stage Venture Incubation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Hotbank Sbvc
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hotbank Sbvc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Hotbank Sbvc in the sector have low bargaining power. Hotbank: Softbank's New Business Model for Early Stage Venture Incubation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hotbank Sbvc to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Hotbank Sbvc in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Technology & Operations industry
– Hotbank: Softbank's New Business Model for Early Stage Venture Incubation firm has clearly differentiated products in the market place. This has enabled Hotbank Sbvc to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Hotbank Sbvc to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Hotbank Sbvc is present in almost all the verticals within the industry. This has provided firm in Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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.
Cross disciplinary teams
– Horizontal connected teams at the Hotbank Sbvc 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.
Operational resilience
– The operational resilience strategy in the Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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.
Innovation driven organization
– Hotbank Sbvc is one of the most innovative firm in sector. Manager in Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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
– Hotbank Sbvc is one of the leading recruiters in the industry. Managers in the Hotbank: Softbank's New Business Model for Early Stage Venture Incubation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Hotbank: Softbank's New Business Model for Early Stage Venture Incubation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hotbank: Softbank's New Business Model for Early Stage Venture Incubation are -
Slow to strategic competitive environment developments
– As Hotbank: Softbank's New Business Model for Early Stage Venture Incubation HBR case study mentions - Hotbank Sbvc 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.
Low market penetration in new markets
– Outside its home market of Hotbank Sbvc, firm in the HBR case study Hotbank: Softbank's New Business Model for Early Stage Venture Incubation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Hotbank Sbvc is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Hotbank Sbvc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hotbank Sbvc to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Hotbank Sbvc products
– To increase the profitability and margins on the products, Hotbank Sbvc needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Hotbank Sbvc 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.
No frontier risks strategy
– After analyzing the HBR case study Hotbank: Softbank's New Business Model for Early Stage Venture Incubation, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hotbank Sbvc is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hotbank: Softbank's New Business Model for Early Stage Venture Incubation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Hotbank Sbvc 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 - Hotbank: Softbank's New Business Model for Early Stage Venture Incubation should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hotbank: Softbank's New Business Model for Early Stage Venture Incubation, is just above the industry average. Hotbank Sbvc 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hotbank: Softbank's New Business Model for Early Stage Venture Incubation, in the dynamic environment Hotbank Sbvc has struggled to respond to the nimble upstart competition. Hotbank Sbvc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Hotbank Sbvc 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.
Opportunities Hotbank: Softbank's New Business Model for Early Stage Venture Incubation | 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 Hotbank: Softbank's New Business Model for Early Stage Venture Incubation are -
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. Hotbank Sbvc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Hotbank Sbvc 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hotbank Sbvc 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 Hotbank Sbvc to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Hotbank Sbvc 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.
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 Hotbank Sbvc in the consumer business. Now Hotbank Sbvc can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Hotbank Sbvc can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Hotbank Sbvc 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hotbank Sbvc 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, Hotbank: Softbank's New Business Model for Early Stage Venture Incubation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hotbank Sbvc is facing challenges because of the dominance of functional experts in the organization. Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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.
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. Hotbank Sbvc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hotbank Sbvc can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Hotbank Sbvc 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.
Better consumer reach
– The expansion of the 5G network will help Hotbank Sbvc to increase its market reach. Hotbank Sbvc 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.
Threats Hotbank: Softbank's New Business Model for Early Stage Venture Incubation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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. Hotbank Sbvc 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.
Increasing wage structure of Hotbank Sbvc
– 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 Hotbank Sbvc.
Technology acceleration in Forth Industrial Revolution
– Hotbank Sbvc has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Hotbank Sbvc 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.
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. Hotbank Sbvc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hotbank Sbvc 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 Hotbank: Softbank's New Business Model for Early Stage Venture Incubation .
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 Hotbank Sbvc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hotbank Sbvc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Hotbank Sbvc 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 Hotbank Sbvc business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Hotbank Sbvc 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.
Environmental challenges
– Hotbank Sbvc 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. Hotbank Sbvc can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hotbank Sbvc in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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 Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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 Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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 Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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 Hotbank: Softbank's New Business Model for Early Stage Venture Incubation 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 Hotbank Sbvc needs to make to build a sustainable competitive advantage.