TSG Hoffenheim: Football in the Age of Analytics SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of TSG Hoffenheim: Football in the Age of Analytics
In 2015, Dietmar Hopp, owner of Germany's Bundesliga football team TSG Hoffenheim and co-founder of the global enterprise software company SAP, was considering how to ensure long-term sustainability and competitiveness for TSG Hoffenheim. While historically a small team from bottom rungs of the league, TSG Hoffenheim, with revenues of a??60 million to a??70 million, reached the top division of the Bundesliga in the 2008-2009 season thanks to a deliberate strategy focused on enhanced scouting, strong youth programs, and innovative technology and analytics that improved player development. In 2014 Hopp, who had personally invested a??300 million in the club, built a "footbonaut," an automated training environment that collected data on players' skills and strengths. The tool, one of three in the world, helped scouts and coaches better assess and develop each player. Yet some managers felt the technology was a distraction, an investment too expensive for a team that was not yet cash-flow positive. The team finished the 2014-2015 season in eighth place, below the top division, and Hopp wondered whether the focus on technology and analytics was the right strategy to grow the club. He wondered if the "moneyball" approach-when a smaller team competed with wealthier teams by using statistical analysis to buy undervalued assets and sell overvalued assets-could work in football and if investments in technology could lead the team to financial independence.
Authors :: Feng Zhu, Karim R. Lakhani, Sascha L. Schmidt, Kerry Herman
Swot Analysis of "TSG Hoffenheim: Football in the Age of Analytics" written by Feng Zhu, Karim R. Lakhani, Sascha L. Schmidt, Kerry Herman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hoffenheim Tsg facing as an external strategic factors. Some of the topics covered in TSG Hoffenheim: Football in the Age of Analytics case study are - Strategic Management Strategies, Performance measurement, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the TSG Hoffenheim: Football in the Age of Analytics casestudy better are - – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , technology disruption, etc
Introduction to SWOT Analysis of TSG Hoffenheim: Football in the Age of Analytics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TSG Hoffenheim: Football in the Age of Analytics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hoffenheim Tsg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hoffenheim Tsg 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 TSG Hoffenheim: Football in the Age of Analytics can be done for the following purposes –
1. Strategic planning using facts provided in TSG Hoffenheim: Football in the Age of Analytics case study
2. Improving business portfolio management of Hoffenheim Tsg
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 Hoffenheim Tsg
Strengths TSG Hoffenheim: Football in the Age of Analytics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hoffenheim Tsg in TSG Hoffenheim: Football in the Age of Analytics Harvard Business Review case study are -
High switching costs
– The high switching costs that Hoffenheim Tsg 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.
Sustainable margins compare to other players in Technology & Operations industry
– TSG Hoffenheim: Football in the Age of Analytics firm has clearly differentiated products in the market place. This has enabled Hoffenheim Tsg to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Hoffenheim Tsg to invest into research and development (R&D) and innovation.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Hoffenheim Tsg digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hoffenheim Tsg has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Hoffenheim Tsg 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 TSG Hoffenheim: Football in the Age of Analytics HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Hoffenheim Tsg has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in TSG Hoffenheim: Football in the Age of Analytics 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.
High brand equity
– Hoffenheim Tsg has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hoffenheim Tsg to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Hoffenheim Tsg in the sector have low bargaining power. TSG Hoffenheim: Football in the Age of Analytics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hoffenheim Tsg to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Hoffenheim Tsg in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Hoffenheim Tsg has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hoffenheim Tsg 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.
Diverse revenue streams
– Hoffenheim Tsg is present in almost all the verticals within the industry. This has provided firm in TSG Hoffenheim: Football in the Age of Analytics 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
- Hoffenheim Tsg 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 Hoffenheim Tsg is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TSG Hoffenheim: Football in the Age of Analytics Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Hoffenheim Tsg is one of the leading recruiters in the industry. Managers in the TSG Hoffenheim: Football in the Age of Analytics are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses TSG Hoffenheim: Football in the Age of Analytics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TSG Hoffenheim: Football in the Age of Analytics are -
Capital Spending Reduction
– Even during the low interest decade, Hoffenheim Tsg 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.
Aligning sales with marketing
– It come across in the case study TSG Hoffenheim: Football in the Age of Analytics 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 TSG Hoffenheim: Football in the Age of Analytics can leverage the sales team experience to cultivate customer relationships as Hoffenheim Tsg is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study TSG Hoffenheim: Football in the Age of Analytics, in the dynamic environment Hoffenheim Tsg has struggled to respond to the nimble upstart competition. Hoffenheim Tsg has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Hoffenheim Tsg 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.
Slow decision making process
– As mentioned earlier in the report, Hoffenheim Tsg 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. Hoffenheim Tsg 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.
Skills based hiring
– The stress on hiring functional specialists at Hoffenheim Tsg 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.
Interest costs
– Compare to the competition, Hoffenheim Tsg 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Feng Zhu, Karim R. Lakhani, Sascha L. Schmidt, Kerry Herman suggests that, Hoffenheim Tsg 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.
No frontier risks strategy
– After analyzing the HBR case study TSG Hoffenheim: Football in the Age of Analytics, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study TSG Hoffenheim: Football in the Age of Analytics, is just above the industry average. Hoffenheim Tsg 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.
High operating costs
– Compare to the competitors, firm in the HBR case study TSG Hoffenheim: Football in the Age of Analytics 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 Hoffenheim Tsg 's lucrative customers.
Opportunities TSG Hoffenheim: Football in the Age of Analytics | 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 TSG Hoffenheim: Football in the Age of Analytics are -
Learning at scale
– Online learning technologies has now opened space for Hoffenheim Tsg 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hoffenheim Tsg can use these opportunities to build new business models that can help the communities that Hoffenheim Tsg operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hoffenheim Tsg 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.
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 Hoffenheim Tsg in the consumer business. Now Hoffenheim Tsg can target international markets with far fewer capital restrictions requirements than the existing system.
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. Hoffenheim Tsg 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
– Hoffenheim Tsg 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 Hoffenheim Tsg 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 Hoffenheim Tsg to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Hoffenheim Tsg 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hoffenheim Tsg 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, TSG Hoffenheim: Football in the Age of Analytics, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Hoffenheim Tsg 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.
Buying journey improvements
– Hoffenheim Tsg can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TSG Hoffenheim: Football in the Age of Analytics 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.
Building a culture of innovation
– managers at Hoffenheim Tsg 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.
Better consumer reach
– The expansion of the 5G network will help Hoffenheim Tsg to increase its market reach. Hoffenheim Tsg will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats TSG Hoffenheim: Football in the Age of Analytics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TSG Hoffenheim: Football in the Age of Analytics are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hoffenheim Tsg 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.
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 Hoffenheim Tsg 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 Hoffenheim Tsg with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Hoffenheim Tsg needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
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 Hoffenheim Tsg.
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 Hoffenheim Tsg in the Technology & Operations sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Hoffenheim Tsg 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.
Technology acceleration in Forth Industrial Revolution
– Hoffenheim Tsg has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Hoffenheim Tsg 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.
High dependence on third party suppliers
– Hoffenheim Tsg 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.
Consumer confidence and its impact on Hoffenheim Tsg 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.
Stagnating economy with rate increase
– Hoffenheim Tsg 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.
Weighted SWOT Analysis of TSG Hoffenheim: Football in the Age of Analytics 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 TSG Hoffenheim: Football in the Age of Analytics 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 TSG Hoffenheim: Football in the Age of Analytics 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 TSG Hoffenheim: Football in the Age of Analytics 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 TSG Hoffenheim: Football in the Age of Analytics 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 Hoffenheim Tsg needs to make to build a sustainable competitive advantage.
