AUCNET: TV Auction Network System SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of AUCNET: TV Auction Network System
The AUCNET system links buyers and sellers in the wholesale used car market in Japan. Video images delivered via videodisk or satellite along with an inspector's opinion and objective character based data are used to conduct a realtime auction over computers and telecommunications links. Over 1,000 cars are sold in a once-weekly auction. The company is considering exporting the technology to the United States. The following issues are raised: 1) What are the characteristics of markets which are suitable for this technology? 2) What are the important management issues with respect to implementation and operation of such an Electronic Market Access Forum? 3) What is the impact on market structure? and 4) What issues are raised in trying to move the technology to new markets?
Authors :: Benn Konsynski, Art Warbelow, Jiro Kokuryo
Swot Analysis of "AUCNET: TV Auction Network System" written by Benn Konsynski, Art Warbelow, Jiro Kokuryo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aucnet Auction facing as an external strategic factors. Some of the topics covered in AUCNET: TV Auction Network System case study are - Strategic Management Strategies, Data, IT, Marketing, Negotiations and Technology & Operations.
Some of the macro environment factors that can be used to understand the AUCNET: TV Auction Network System casestudy better are - – increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing energy prices,
talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of AUCNET: TV Auction Network System
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AUCNET: TV Auction Network System case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aucnet Auction, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aucnet Auction operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of AUCNET: TV Auction Network System can be done for the following purposes –
1. Strategic planning using facts provided in AUCNET: TV Auction Network System case study
2. Improving business portfolio management of Aucnet Auction
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aucnet Auction
Strengths AUCNET: TV Auction Network System | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aucnet Auction in AUCNET: TV Auction Network System Harvard Business Review case study are -
High brand equity
– Aucnet Auction has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aucnet Auction to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Aucnet Auction is one of the most innovative firm in sector. Manager in AUCNET: TV Auction Network System Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Aucnet Auction
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aucnet Auction does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Aucnet Auction 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.
Operational resilience
– The operational resilience strategy in the AUCNET: TV Auction Network System Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Technology & Operations field
– Aucnet Auction 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 Aucnet Auction in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Aucnet Auction has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aucnet Auction has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Aucnet Auction in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Aucnet Auction is one of the leading recruiters in the industry. Managers in the AUCNET: TV Auction Network System 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 Aucnet Auction in the sector have low bargaining power. AUCNET: TV Auction Network System has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aucnet Auction to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Aucnet Auction is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Benn Konsynski, Art Warbelow, Jiro Kokuryo can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Aucnet Auction has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AUCNET: TV Auction Network System Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses AUCNET: TV Auction Network System | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AUCNET: TV Auction Network System are -
No frontier risks strategy
– After analyzing the HBR case study AUCNET: TV Auction Network System, 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.
Capital Spending Reduction
– Even during the low interest decade, Aucnet Auction 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.
Low market penetration in new markets
– Outside its home market of Aucnet Auction, firm in the HBR case study AUCNET: TV Auction Network System needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Benn Konsynski, Art Warbelow, Jiro Kokuryo suggests that, Aucnet Auction is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Increasing silos among functional specialists
– The organizational structure of Aucnet Auction is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Aucnet Auction needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aucnet Auction to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Aucnet Auction 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.
Interest costs
– Compare to the competition, Aucnet Auction has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Aligning sales with marketing
– It come across in the case study AUCNET: TV Auction Network System that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case AUCNET: TV Auction Network System can leverage the sales team experience to cultivate customer relationships as Aucnet Auction is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Aucnet Auction 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.
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 Aucnet Auction supply chain. Even after few cautionary changes mentioned in the HBR case study - AUCNET: TV Auction Network System, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aucnet Auction vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aucnet Auction is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AUCNET: TV Auction Network System can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities AUCNET: TV Auction Network System | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study AUCNET: TV Auction Network System are -
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. Aucnet Auction 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. Aucnet Auction 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.
Leveraging digital technologies
– Aucnet Auction can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Aucnet Auction 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.
Loyalty marketing
– Aucnet Auction has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aucnet Auction 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, AUCNET: TV Auction Network System, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aucnet Auction 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.
Using analytics as competitive advantage
– Aucnet Auction has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study AUCNET: TV Auction Network System - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aucnet Auction to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Aucnet Auction can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Developing new processes and practices
– Aucnet Auction can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Aucnet Auction in the consumer business. Now Aucnet Auction can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Aucnet Auction can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AUCNET: TV Auction Network System 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.
Creating value in data economy
– The success of analytics program of Aucnet Auction has opened avenues for new revenue streams for the organization in the industry. This can help Aucnet Auction to build a more holistic ecosystem as suggested in the AUCNET: TV Auction Network System case study. Aucnet Auction can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aucnet Auction 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 Aucnet Auction to hire the very best people irrespective of their geographical location.
Threats AUCNET: TV Auction Network System External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AUCNET: TV Auction Network System are -
Environmental challenges
– Aucnet Auction 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. Aucnet Auction can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Technology acceleration in Forth Industrial Revolution
– Aucnet Auction has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Aucnet Auction 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.
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.
High dependence on third party suppliers
– Aucnet Auction 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.
Increasing wage structure of Aucnet Auction
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Aucnet Auction.
Shortening product life cycle
– it is one of the major threat that Aucnet Auction is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Aucnet Auction can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Aucnet Auction demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Aucnet Auction in the Technology & Operations sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Aucnet Auction will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aucnet Auction with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Aucnet Auction can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Aucnet Auction.
Weighted SWOT Analysis of AUCNET: TV Auction Network System Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study AUCNET: TV Auction Network System needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study AUCNET: TV Auction Network System is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study AUCNET: TV Auction Network System is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of AUCNET: TV Auction Network System is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Aucnet Auction needs to make to build a sustainable competitive advantage.
