X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A)
Three years after launching his brick-and-mortar store, X Fire Paintball and Airsoft, Steve Herbert Sr. and his sons began selling products on Amazon.com's third-party Marketplace and online sales expanded rapidly. Over time, X Fire noticed that products of which it had once been the only seller were now being sold by Amazon straight from X Fire's suppliers, effectively cutting X Fire out. Amazon was also ignoring the minimum advertised price (MAP) set by manufacturers. How should X Fire defend itself? Now Amazon representatives were approaching X Fire to encourage them to sell on Amazon's smaller but growing Canadian Marketplace. How should X Fire respond to this opportunity?
Swot Analysis of "X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A)" written by Feng Zhu, Angela Acocella includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fire Amazon facing as an external strategic factors. Some of the topics covered in X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) case study are - Strategic Management Strategies, Ethics, IT, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) casestudy better are - – increasing energy prices, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fire Amazon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fire Amazon 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 X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) can be done for the following purposes –
1. Strategic planning using facts provided in X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) case study
2. Improving business portfolio management of Fire Amazon
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 Fire Amazon
Strengths X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fire Amazon in X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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.
Organizational Resilience of Fire Amazon
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fire Amazon does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Technology & Operations industry
– X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) firm has clearly differentiated products in the market place. This has enabled Fire Amazon to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Fire Amazon to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Fire Amazon has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fire Amazon 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 Fire Amazon are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Training and development
– Fire Amazon has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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 switching costs
– The high switching costs that Fire Amazon 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.
Learning organization
- Fire Amazon 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 Fire Amazon is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Fire Amazon has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Fire Amazon is one of the most innovative firm in sector. Manager in X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Fire Amazon digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fire Amazon 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 Fire Amazon in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) are -
Need for greater diversity
– Fire Amazon has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A), it seems that the employees of Fire Amazon 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 Fire Amazon supply chain. Even after few cautionary changes mentioned in the HBR case study - X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fire Amazon vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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 Fire Amazon has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Fire Amazon is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Fire Amazon needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fire Amazon to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fire Amazon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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 Fire Amazon 's lucrative customers.
High cash cycle compare to competitors
Fire Amazon 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A), in the dynamic environment Fire Amazon has struggled to respond to the nimble upstart competition. Fire Amazon has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Fire Amazon 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. Fire Amazon 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Feng Zhu, Angela Acocella suggests that, Fire Amazon 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.
Opportunities X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) | 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 X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fire Amazon is facing challenges because of the dominance of functional experts in the organization. X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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.
Buying journey improvements
– Fire Amazon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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.
Manufacturing automation
– Fire Amazon 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 Fire Amazon 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, Fire Amazon 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.
Building a culture of innovation
– managers at Fire Amazon 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fire Amazon 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 Fire Amazon to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Fire Amazon to increase its market reach. Fire Amazon 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.
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 Fire Amazon 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.
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. Fire Amazon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Fire Amazon has opened avenues for new revenue streams for the organization in the industry. This can help Fire Amazon to build a more holistic ecosystem as suggested in the X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) case study. Fire Amazon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fire Amazon 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, X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Fire Amazon 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.
Threats X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) are -
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. Fire Amazon 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 wage structure of Fire Amazon
– 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 Fire Amazon.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fire Amazon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fire Amazon 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.
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 Fire Amazon.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fire Amazon 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 X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) .
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.
Consumer confidence and its impact on Fire Amazon 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.
Shortening product life cycle
– it is one of the major threat that Fire Amazon is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fire Amazon can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Fire Amazon business can come under increasing regulations regarding data privacy, data security, 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 Fire Amazon in the Technology & Operations sector and impact the bottomline of the organization.
Weighted SWOT Analysis of X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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 X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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 X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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 X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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 X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (A) 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 Fire Amazon needs to make to build a sustainable competitive advantage.
