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 - – increasing commodity prices, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
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.
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.
Strong track record of project management
– Www.edmunds.com Edmund's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Superior customer experience
– The customer experience strategy of Www.edmunds.com Edmund's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Organizational Resilience of Www.edmunds.com Edmund's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Www.edmunds.com Edmund's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Analytics focus
– Www.edmunds.com Edmund's 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 John J. Sviokla 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.
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.
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 -
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Edmund's--www.edmunds.com, in the dynamic environment Www.edmunds.com Edmund's has struggled to respond to the nimble upstart competition. Www.edmunds.com Edmund's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Edmund's--www.edmunds.com 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 Www.edmunds.com Edmund's has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Www.edmunds.com Edmund's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Www.edmunds.com Edmund's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Www.edmunds.com Edmund's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Www.edmunds.com Edmund's products
– To increase the profitability and margins on the products, Www.edmunds.com Edmund's needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Edmund's--www.edmunds.com 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 Www.edmunds.com Edmund's 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Www.edmunds.com Edmund's 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.
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.
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 -
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.
Developing new processes and practices
– Www.edmunds.com Edmund's 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.
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.
Learning at scale
– Online learning technologies has now opened space for Www.edmunds.com Edmund's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Www.edmunds.com Edmund's 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 Www.edmunds.com Edmund's to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Www.edmunds.com Edmund's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Www.edmunds.com Edmund's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Www.edmunds.com Edmund's can use these opportunities to build new business models that can help the communities that Www.edmunds.com Edmund's operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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 -
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Www.edmunds.com Edmund's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Edmund's--www.edmunds.com .
Technology acceleration in Forth Industrial Revolution
– Www.edmunds.com Edmund's has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Www.edmunds.com Edmund's 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.
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.
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.
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. Www.edmunds.com Edmund's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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
– 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.
Shortening product life cycle
– it is one of the major threat that Www.edmunds.com Edmund's 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.
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.
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.
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.
