AUCNET: TV Auction Network System SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of AUCNET: TV Auction Network System
The AUCNET system links buyers and sellers in the wholesale used car market in Japan. Video images delivered via videodisk or satellite along with an inspector's opinion and objective character based data are used to conduct a realtime auction over computers and telecommunications links. Over 1,000 cars are sold in a once-weekly auction. The company is considering exporting the technology to the United States. The following issues are raised: 1) What are the characteristics of markets which are suitable for this technology? 2) What are the important management issues with respect to implementation and operation of such an Electronic Market Access Forum? 3) What is the impact on market structure? and 4) What issues are raised in trying to move the technology to new markets?
Authors :: Benn Konsynski, Art Warbelow, Jiro Kokuryo
Swot Analysis of "AUCNET: TV Auction Network System" written by Benn Konsynski, Art Warbelow, Jiro Kokuryo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aucnet Auction facing as an external strategic factors. Some of the topics covered in AUCNET: TV Auction Network System case study are - Strategic Management Strategies, Data, IT, Marketing, Negotiations and Technology & Operations.
Some of the macro environment factors that can be used to understand the AUCNET: TV Auction Network System casestudy better are - – wage bills are increasing, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, geopolitical disruptions, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
cloud computing is disrupting traditional business models, technology disruption, etc
Introduction to SWOT Analysis of AUCNET: TV Auction Network System
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AUCNET: TV Auction Network System case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aucnet Auction, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aucnet Auction 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 AUCNET: TV Auction Network System can be done for the following purposes –
1. Strategic planning using facts provided in AUCNET: TV Auction Network System case study
2. Improving business portfolio management of Aucnet Auction
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 Aucnet Auction
Strengths AUCNET: TV Auction Network System | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aucnet Auction in AUCNET: TV Auction Network System Harvard Business Review case study are -
High brand equity
– Aucnet Auction has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aucnet Auction to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Aucnet Auction has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aucnet Auction 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.
Low bargaining power of suppliers
– Suppliers of Aucnet Auction in the sector have low bargaining power. AUCNET: TV Auction Network System has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aucnet Auction to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Aucnet Auction in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Aucnet Auction 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.
Cross disciplinary teams
– Horizontal connected teams at the Aucnet Auction 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
– Aucnet Auction has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AUCNET: TV Auction Network System 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.
Learning organization
- Aucnet Auction 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 Aucnet Auction is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AUCNET: TV Auction Network System Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Aucnet Auction
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aucnet Auction does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Aucnet Auction is present in almost all the verticals within the industry. This has provided firm in AUCNET: TV Auction Network System 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.
Ability to lead change in Technology & Operations field
– Aucnet Auction is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Aucnet Auction in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Aucnet Auction 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 Benn Konsynski, Art Warbelow, Jiro Kokuryo 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.
Weaknesses AUCNET: TV Auction Network System | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AUCNET: TV Auction Network System are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AUCNET: TV Auction Network System, in the dynamic environment Aucnet Auction has struggled to respond to the nimble upstart competition. Aucnet Auction 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
– Aucnet Auction 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aucnet Auction is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AUCNET: TV Auction Network System 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 operating costs
– Compare to the competitors, firm in the HBR case study AUCNET: TV Auction Network System 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 Aucnet Auction 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AUCNET: TV Auction Network System, it seems that the employees of Aucnet Auction don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Increasing silos among functional specialists
– The organizational structure of Aucnet Auction is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Aucnet Auction needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aucnet Auction to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Aucnet Auction products
– To increase the profitability and margins on the products, Aucnet Auction needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Aucnet Auction, firm in the HBR case study AUCNET: TV Auction Network System needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AUCNET: TV Auction Network System 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 Aucnet Auction has relatively successful track record of launching new products.
Products dominated business model
– Even though Aucnet Auction 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 - AUCNET: TV Auction Network System should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Aucnet Auction 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.
Opportunities AUCNET: TV Auction Network System | 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 AUCNET: TV Auction Network System are -
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. Aucnet Auction can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aucnet Auction can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Aucnet Auction can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aucnet Auction can use these opportunities to build new business models that can help the communities that Aucnet Auction operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Developing new processes and practices
– Aucnet Auction 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 Aucnet Auction has opened avenues for new revenue streams for the organization in the industry. This can help Aucnet Auction to build a more holistic ecosystem as suggested in the AUCNET: TV Auction Network System case study. Aucnet Auction can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Aucnet Auction 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.
Loyalty marketing
– Aucnet Auction has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Aucnet Auction 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 AUCNET: TV Auction Network System - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aucnet Auction to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Aucnet Auction can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AUCNET: TV Auction Network System 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aucnet Auction 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 Aucnet Auction to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Aucnet Auction to increase its market reach. Aucnet Auction 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 Aucnet Auction in the consumer business. Now Aucnet Auction can target international markets with far fewer capital restrictions requirements than the existing system.
Threats AUCNET: TV Auction Network System External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AUCNET: TV Auction Network System are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aucnet Auction with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Aucnet Auction 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.
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
– Aucnet Auction 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.
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 Aucnet Auction.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aucnet Auction 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 AUCNET: TV Auction Network System .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aucnet Auction 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.
Stagnating economy with rate increase
– Aucnet Auction 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.
Technology acceleration in Forth Industrial Revolution
– Aucnet Auction has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Aucnet Auction 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. Aucnet Auction can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Aucnet Auction 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AUCNET: TV Auction Network System, Aucnet Auction 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 .
Weighted SWOT Analysis of AUCNET: TV Auction Network System 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 AUCNET: TV Auction Network System 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 AUCNET: TV Auction Network System 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 AUCNET: TV Auction Network System 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 AUCNET: TV Auction Network System 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 Aucnet Auction needs to make to build a sustainable competitive advantage.