Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India
The case opens with XGen Technologies, a software-led IT solutions provider, being placed in a situation of having to grapple with the issues of linear growth, similar to most of the contemporary ITES companies. XGen's traditional ''linear'' business model now had Partha Sen, the CEO, seeking out new profit opportunities. The company's headcount had touched a whopping 40,000 and managing such a large setup was becoming a severe challenge. Besides, in the emerging war for talent, sourcing and retaining quality talent was another problem. An export-driven software services company, XGen earned substantial revenues in dollars, and the appreciation of the rupee by close to 15% coupled with rising salaries had impacted its profit margins in the current fiscal. All these factors, and the fact that XGen was a listed company, put immense pressure on Partha to adopt an innovative business model to ward off pressure on bottom lines, ensure sustainability of the business in the long run. Most Indian ITES companies had been clocking impressive growth, yet there were concerns about the future, particularly with regard to the burden and difficulties that were expected in manpower intensive business models that inextricably had to struggle with ever-escalating costs as well as increasing complexity in managing its humongous operations. The focus of the case then shifts to the various strategies that software companies have been adopting in order to achieve greater non-linearity in their business. In particular, the case concentrates on Zyme Solutions, Inc., a fully outsourced hosted data service provider to the high-tech vertical market, which has built a non-linear business from the ground up, without the legacy of the linear business models to contend with. The second half of the case describes in detail how Zyme Solutions has gone about constructing an innovative non-linear business model for its business.
Swot Analysis of "Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India" written by D.V.R. Seshadri includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Linear Xgen facing as an external strategic factors. Some of the topics covered in Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India case study are - Strategic Management Strategies, IT, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India casestudy better are - – geopolitical disruptions, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
increasing household debt because of falling income levels, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Linear Xgen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Linear Xgen 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India can be done for the following purposes –
1. Strategic planning using facts provided in Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India case study
2. Improving business portfolio management of Linear Xgen
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 Linear Xgen
Strengths Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Linear Xgen in Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India Harvard Business Review case study are -
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Linear Xgen digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Linear Xgen 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.
Superior customer experience
– The customer experience strategy of Linear Xgen 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 Linear Xgen 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.
Ability to lead change in Technology & Operations field
– Linear Xgen 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 Linear Xgen in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Technology & Operations industry
– Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India firm has clearly differentiated products in the market place. This has enabled Linear Xgen to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Linear Xgen to invest into research and development (R&D) and innovation.
Strong track record of project management
– Linear Xgen is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Linear Xgen is one of the most innovative firm in sector. Manager in Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Linear Xgen is one of the leading recruiters in the industry. Managers in the Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Linear Xgen in the sector have low bargaining power. Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Linear Xgen to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Linear Xgen has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Linear Xgen 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.
Training and development
– Linear Xgen has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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.
Organizational Resilience of Linear Xgen
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Linear Xgen does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India are -
No frontier risks strategy
– After analyzing the HBR case study Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India, 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.
Products dominated business model
– Even though Linear Xgen 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 - Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Linear Xgen 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 to strategic competitive environment developments
– As Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India HBR case study mentions - Linear Xgen 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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 Linear Xgen 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Linear Xgen 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India, it seems that the employees of Linear Xgen 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Linear Xgen supply chain. Even after few cautionary changes mentioned in the HBR case study - Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Linear Xgen vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, D.V.R. Seshadri suggests that, Linear Xgen 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.
Increasing silos among functional specialists
– The organizational structure of Linear Xgen is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Linear Xgen needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Linear Xgen to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India, is just above the industry average. Linear Xgen 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India | 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India are -
Loyalty marketing
– Linear Xgen 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Linear Xgen can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Linear Xgen can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– Linear Xgen can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Linear Xgen 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.
Learning at scale
– Online learning technologies has now opened space for Linear Xgen 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
– Linear Xgen 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Linear Xgen can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Linear Xgen can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Linear Xgen can use these opportunities to build new business models that can help the communities that Linear Xgen operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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. Linear Xgen can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Linear Xgen in the consumer business. Now Linear Xgen can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Linear Xgen to increase its market reach. Linear Xgen 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Linear Xgen 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, Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Linear Xgen with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Linear Xgen.
Regulatory challenges
– Linear Xgen 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.
Shortening product life cycle
– it is one of the major threat that Linear Xgen is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Linear Xgen 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India .
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 Linear Xgen business can come under increasing regulations regarding data privacy, data security, etc.
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. Linear Xgen 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Linear Xgen 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.
Technology acceleration in Forth Industrial Revolution
– Linear Xgen has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Linear Xgen 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 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. Linear Xgen needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Consumer confidence and its impact on Linear Xgen 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India, Linear Xgen 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 .
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 Linear Xgen in the Technology & Operations sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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 Linear Xgen needs to make to build a sustainable competitive advantage.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India
