Case Study Description of Edmund's--www.edmunds.com
Edmund's publishes an automobile price guide in books (600,000 units per year) and over the Internet (16,000 users a day and growing). The site can be visited at www.edmunds.com. In the marketplace, it makes money selling books. In the marketspace, they make their money on referrals--referring customers to Auto-By-Tel, a car-shopping service, and GEICO, an auto insurer, among others.
Swot Analysis of "Edmund's--www.edmunds.com" written by John J. Sviokla includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Www.edmunds.com Edmund's facing as an external strategic factors. Some of the topics covered in Edmund's--www.edmunds.com case study are - Strategic Management Strategies, Marketing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Edmund's--www.edmunds.com casestudy better are - – technology disruption, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, there is backlash against globalization,
central banks are concerned over increasing inflation, increasing energy prices, etc
Introduction to SWOT Analysis of Edmund's--www.edmunds.com
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Edmund's--www.edmunds.com case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Www.edmunds.com Edmund's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Www.edmunds.com Edmund'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 Edmund's--www.edmunds.com can be done for the following purposes –
1. Strategic planning using facts provided in Edmund's--www.edmunds.com case study
2. Improving business portfolio management of Www.edmunds.com Edmund's
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 Www.edmunds.com Edmund's
Strengths Edmund's--www.edmunds.com | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Www.edmunds.com Edmund's in Edmund's--www.edmunds.com Harvard Business Review case study are -
Effective Research and Development (R&D)
– Www.edmunds.com Edmund's 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 Edmund's--www.edmunds.com - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Www.edmunds.com Edmund'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.
Training and development
– Www.edmunds.com Edmund's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Edmund's--www.edmunds.com 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Www.edmunds.com Edmund's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Www.edmunds.com Edmund'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.
Sustainable margins compare to other players in Technology & Operations industry
– Edmund's--www.edmunds.com firm has clearly differentiated products in the market place. This has enabled Www.edmunds.com Edmund's to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Www.edmunds.com Edmund's to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Www.edmunds.com Edmund's is one of the leading recruiters in the industry. Managers in the Edmund's--www.edmunds.com are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Www.edmunds.com Edmund's is present in almost all the verticals within the industry. This has provided firm in Edmund's--www.edmunds.com 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.
Learning organization
- Www.edmunds.com Edmund'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 Www.edmunds.com Edmund's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Edmund's--www.edmunds.com Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Www.edmunds.com Edmund's is one of the most innovative firm in sector. Manager in Edmund's--www.edmunds.com Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Www.edmunds.com Edmund's in the sector have low bargaining power. Edmund's--www.edmunds.com has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Www.edmunds.com Edmund's to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Www.edmunds.com Edmund's 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.
Operational resilience
– The operational resilience strategy in the Edmund's--www.edmunds.com 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.
Weaknesses Edmund's--www.edmunds.com | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Edmund's--www.edmunds.com are -
Need for greater diversity
– Www.edmunds.com Edmund'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.
Increasing silos among functional specialists
– The organizational structure of Www.edmunds.com Edmund's is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Www.edmunds.com Edmund's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Www.edmunds.com Edmund's to focus more on services rather than just following the product 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 Www.edmunds.com Edmund's supply chain. Even after few cautionary changes mentioned in the HBR case study - Edmund's--www.edmunds.com, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Www.edmunds.com Edmund's vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Www.edmunds.com Edmund'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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Edmund's--www.edmunds.com, is just above the industry average. Www.edmunds.com Edmund'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.
Aligning sales with marketing
– It come across in the case study Edmund's--www.edmunds.com 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 Edmund's--www.edmunds.com can leverage the sales team experience to cultivate customer relationships as Www.edmunds.com Edmund's is planning to shift buying processes online.
Products dominated business model
– Even though Www.edmunds.com Edmund's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Edmund's--www.edmunds.com should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Edmund's--www.edmunds.com HBR case study mentions - Www.edmunds.com Edmund's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Www.edmunds.com Edmund's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Edmund's--www.edmunds.com can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Www.edmunds.com Edmund's 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.
Skills based hiring
– The stress on hiring functional specialists at Www.edmunds.com Edmund's 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 Edmund's--www.edmunds.com | 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 Edmund's--www.edmunds.com are -
Better consumer reach
– The expansion of the 5G network will help Www.edmunds.com Edmund's to increase its market reach. Www.edmunds.com Edmund's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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 Www.edmunds.com Edmund's in the consumer business. Now Www.edmunds.com Edmund's can target international markets with far fewer capital restrictions requirements than the existing system.
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. Www.edmunds.com Edmund's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Www.edmunds.com Edmund'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.
Using analytics as competitive advantage
– Www.edmunds.com Edmund'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 Edmund's--www.edmunds.com - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Www.edmunds.com Edmund's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Www.edmunds.com Edmund'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, Edmund's--www.edmunds.com, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Www.edmunds.com Edmund's 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.
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. Www.edmunds.com Edmund's 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 Www.edmunds.com Edmund's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Creating value in data economy
– The success of analytics program of Www.edmunds.com Edmund's has opened avenues for new revenue streams for the organization in the industry. This can help Www.edmunds.com Edmund's to build a more holistic ecosystem as suggested in the Edmund's--www.edmunds.com case study. Www.edmunds.com Edmund's 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, Www.edmunds.com Edmund's is facing challenges because of the dominance of functional experts in the organization. Edmund's--www.edmunds.com 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Www.edmunds.com Edmund's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Buying journey improvements
– Www.edmunds.com Edmund's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Edmund's--www.edmunds.com 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.
Threats Edmund's--www.edmunds.com External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Edmund's--www.edmunds.com are -
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 Www.edmunds.com Edmund's.
Stagnating economy with rate increase
– Www.edmunds.com Edmund'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.
Consumer confidence and its impact on Www.edmunds.com Edmund's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
High dependence on third party suppliers
– Www.edmunds.com Edmund'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.
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 Www.edmunds.com Edmund's business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Www.edmunds.com Edmund's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Www.edmunds.com Edmund'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.
Environmental challenges
– Www.edmunds.com Edmund's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Www.edmunds.com Edmund's can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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
– Www.edmunds.com Edmund'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 Technology & Operations industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Www.edmunds.com Edmund's 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.
Increasing wage structure of Www.edmunds.com Edmund'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 Www.edmunds.com Edmund's.
Weighted SWOT Analysis of Edmund's--www.edmunds.com 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 Edmund's--www.edmunds.com 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 Edmund's--www.edmunds.com 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 Edmund's--www.edmunds.com 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 Edmund's--www.edmunds.com 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 Www.edmunds.com Edmund's needs to make to build a sustainable competitive advantage.