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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, technology disruption, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, there is increasing trade war between United States & China,
increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, 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 -
Operational resilience
– The operational resilience strategy in the AUCNET: TV Auction Network System 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.
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.
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.
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.
Innovation driven organization
– Aucnet Auction is one of the most innovative firm in sector. Manager in AUCNET: TV Auction Network System Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Aucnet Auction digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aucnet Auction 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.
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.
Highly skilled collaborators
– Aucnet Auction 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 AUCNET: TV Auction Network System HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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 -
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Aucnet Auction has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Benn Konsynski, Art Warbelow, Jiro Kokuryo suggests that, Aucnet Auction is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Aucnet Auction 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. Aucnet Auction 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.
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.
Aligning sales with marketing
– It come across in the case study AUCNET: TV Auction Network System 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 AUCNET: TV Auction Network System can leverage the sales team experience to cultivate customer relationships as Aucnet Auction is planning to shift buying processes online.
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.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aucnet Auction is facing challenges because of the dominance of functional experts in the organization. AUCNET: TV Auction Network System 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.
Leveraging digital technologies
– Aucnet Auction 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.
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.
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.
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.
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.
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.
Manufacturing automation
– Aucnet Auction 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.
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.
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.
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.
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.
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 -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study 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 .
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. Aucnet Auction 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 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 .
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.
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.
Increasing wage structure of Aucnet Auction
– 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 Aucnet Auction.
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.
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.
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.
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. Aucnet Auction needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Aucnet Auction is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Aucnet Auction in the Technology & Operations sector and impact the bottomline of the organization.
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.
