Swot Analysis of "NetDragon" written by William R. Kerr, Alexis Brownell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Netdragon Null facing as an external strategic factors. Some of the topics covered in NetDragon case study are - Strategic Management Strategies, Internet and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the NetDragon casestudy better are - – technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
cloud computing is disrupting traditional business models, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NetDragon case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Netdragon Null, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Netdragon Null 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 NetDragon can be done for the following purposes –
1. Strategic planning using facts provided in NetDragon case study
2. Improving business portfolio management of Netdragon Null
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Netdragon Null
Strengths NetDragon | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Netdragon Null in NetDragon Harvard Business Review case study are -
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– NetDragon firm has clearly differentiated products in the market place. This has enabled Netdragon Null to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Netdragon Null to invest into research and development (R&D) and innovation.
Learning organization
- Netdragon Null 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 Netdragon Null is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in NetDragon Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Netdragon Null digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Netdragon Null 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.
Ability to recruit top talent
– Netdragon Null is one of the leading recruiters in the industry. Managers in the NetDragon 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 Netdragon Null 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.
Highly skilled collaborators
– Netdragon Null has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in NetDragon HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Netdragon Null is present in almost all the verticals within the industry. This has provided firm in NetDragon 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.
Organizational Resilience of Netdragon Null
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Netdragon Null does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Netdragon Null is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Netdragon Null in the sector have low bargaining power. NetDragon has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Netdragon Null to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Netdragon Null 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 NetDragon - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Innovation & Entrepreneurship field
– Netdragon Null 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 Netdragon Null in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses NetDragon | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NetDragon are -
Workers concerns about automation
– As automation is fast increasing in the segment, Netdragon Null 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.
Products dominated business model
– Even though Netdragon Null 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 - NetDragon should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Netdragon Null is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Netdragon Null needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Netdragon Null to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Netdragon Null, firm in the HBR case study NetDragon needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study NetDragon 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 Netdragon Null 's lucrative customers.
Aligning sales with marketing
– It come across in the case study NetDragon 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 NetDragon can leverage the sales team experience to cultivate customer relationships as Netdragon Null is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Netdragon Null 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.
Interest costs
– Compare to the competition, Netdragon Null 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.
Lack of clear differentiation of Netdragon Null products
– To increase the profitability and margins on the products, Netdragon Null needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study NetDragon, is just above the industry average. Netdragon Null 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study NetDragon, in the dynamic environment Netdragon Null has struggled to respond to the nimble upstart competition. Netdragon Null has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities NetDragon | 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 NetDragon are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Netdragon Null can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Netdragon Null 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 Innovation & Entrepreneurship segment.
Better consumer reach
– The expansion of the 5G network will help Netdragon Null to increase its market reach. Netdragon Null 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.
Using analytics as competitive advantage
– Netdragon Null 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 NetDragon - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Netdragon Null to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Netdragon Null in the consumer business. Now Netdragon Null can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Netdragon Null 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Netdragon Null 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Netdragon Null 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 Netdragon Null to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Netdragon Null can use these opportunities to build new business models that can help the communities that Netdragon Null operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Buying journey improvements
– Netdragon Null can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. NetDragon 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Netdragon Null 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. Netdragon Null 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.
Creating value in data economy
– The success of analytics program of Netdragon Null has opened avenues for new revenue streams for the organization in the industry. This can help Netdragon Null to build a more holistic ecosystem as suggested in the NetDragon case study. Netdragon Null can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Netdragon Null can develop new processes and procedures in Innovation & Entrepreneurship 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.
Threats NetDragon External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NetDragon are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Netdragon Null 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 NetDragon .
Environmental challenges
– Netdragon Null 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. Netdragon Null can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study NetDragon, Netdragon Null may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Technology acceleration in Forth Industrial Revolution
– Netdragon Null has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Netdragon Null needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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 Netdragon Null in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Regulatory challenges
– Netdragon Null 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 Innovation & Entrepreneurship industry regulations.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Netdragon Null can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Netdragon Null is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Netdragon Null in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Increasing wage structure of Netdragon Null
– 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 Netdragon Null.
Stagnating economy with rate increase
– Netdragon Null 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.
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 Netdragon Null.
Weighted SWOT Analysis of NetDragon 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 NetDragon 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 NetDragon 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 NetDragon 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 NetDragon 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 Netdragon Null needs to make to build a sustainable competitive advantage.
