X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) 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? (B)
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? (B)" 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? (B) case study are - Strategic Management Strategies, 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? (B) casestudy better are - – supply chains are disrupted by pandemic , increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
increasing energy prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B)
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? (B) 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? (B) can be done for the following purposes –
1. Strategic planning using facts provided in X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) 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? (B) | 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? (B) Harvard Business Review case study are -
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? (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Fire Amazon 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 Feng Zhu, Angela Acocella 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.
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.
Ability to lead change in Technology & Operations field
– Fire Amazon 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 Fire Amazon 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
– 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.
Operational resilience
– The operational resilience strategy in the X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) 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.
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.
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? (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Diverse revenue streams
– Fire Amazon is present in almost all the verticals within the industry. This has provided firm in X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Fire Amazon in the sector have low bargaining power. X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fire Amazon to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Fire Amazon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fire Amazon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) | 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? (B) are -
Products dominated business model
– Even though Fire Amazon 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 - X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) should strive to include more intangible value offerings along with its core products and services.
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.
Low market penetration in new markets
– Outside its home market of Fire Amazon, firm in the HBR case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) 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 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? (B) 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B), is just above the industry average. Fire Amazon 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Fire Amazon 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.
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? (B), 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.
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? (B), 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.
Opportunities X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) | 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? (B) are -
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.
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.
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.
Loyalty marketing
– Fire Amazon 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fire Amazon can use these opportunities to build new business models that can help the communities that Fire Amazon operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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.
Using analytics as competitive advantage
– Fire Amazon 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 X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fire Amazon to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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 Fire Amazon in the consumer business. Now Fire Amazon can target international markets with far fewer capital restrictions requirements than the existing system.
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? (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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? (B) 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.
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. Fire Amazon 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. Fire Amazon 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.
Threats X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) 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? (B) are -
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.
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.
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? (B) .
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.
High dependence on third party suppliers
– Fire Amazon 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.
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.
Regulatory challenges
– Fire Amazon 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.
Technology acceleration in Forth Industrial Revolution
– Fire Amazon has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Fire Amazon 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B), Fire Amazon 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 .
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.
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.
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.
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.
Weighted SWOT Analysis of X Fire Paintball & Airsoft: is Amazon a Friend or Foe? (B) 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? (B) 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? (B) 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? (B) 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? (B) 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.