Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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 - – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, geopolitical disruptions, wage bills are increasing, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, 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 -
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Linear Xgen 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.
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.
Operational resilience
– The operational resilience strategy in the Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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.
High brand equity
– Linear Xgen has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Linear Xgen to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Linear Xgen 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 D.V.R. Seshadri 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 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 -
Low market penetration in new markets
– Outside its home market of Linear Xgen, firm in the HBR case study Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
High cash cycle compare to competitors
Linear Xgen 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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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 Linear Xgen has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Linear Xgen needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Linear Xgen is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India, in the dynamic environment Linear Xgen has struggled to respond to the nimble upstart competition. Linear Xgen 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India 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 Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India can leverage the sales team experience to cultivate customer relationships as Linear Xgen is planning to shift buying processes online.
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 -
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. Linear Xgen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Leveraging digital technologies
– Linear Xgen 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.
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.
Building a culture of innovation
– managers at Linear Xgen 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.
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.
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.
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.
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.
Developing new processes and practices
– Linear Xgen 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 Linear Xgen has opened avenues for new revenue streams for the organization in the industry. This can help Linear Xgen to build a more holistic ecosystem as suggested in the Bucking the Trend: A Look at Zyme Solutions' Non-linear Business Model for IT Services from India case study. Linear Xgen can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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 -
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.
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.
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.
Increasing wage structure of Linear Xgen
– 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 Linear Xgen.
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.
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.
Stagnating economy with rate increase
– Linear Xgen 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 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 .
Environmental challenges
– Linear Xgen needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Linear Xgen can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
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.
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.
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