Case Study Description of Testin: Partnering with Multinational Corporations
By 2017, Beijing Testin Information Technology Co., Ltd. (Testin), had forged partnerships with multiple large multinational companies (e.g., Microsoft, IBM, ARM, Intel). Since it was founded in 2011, Testin had served over 800,000 application developers by conducting more than 150 million quality and security tests on over 2.5 million mobile applications. It had received several rounds of financing totaling over $80 million. Many Chinese Internet companies had tried to acquire Testin, and a well-known MNC asked Testin to sign an exclusive service contract. Wang and his partners resisted such offers and were determined that Testin should maintain its neutrality. But as a five-year old enterprise, Testin's big concern was how it could "stay hungry and stay foolish." The authors Shameen Prashantham and Liman Zhao are affiliated with China Europe International Business School.
Swot Analysis of "Testin: Partnering with Multinational Corporations" written by Shameen Prashantham, Liman Zhao includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Testin Prashantham facing as an external strategic factors. Some of the topics covered in Testin: Partnering with Multinational Corporations case study are - Strategic Management Strategies, Joint ventures and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Testin: Partnering with Multinational Corporations casestudy better are - – increasing commodity prices, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Testin: Partnering with Multinational Corporations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Testin: Partnering with Multinational Corporations case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Testin Prashantham, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Testin Prashantham 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 Testin: Partnering with Multinational Corporations can be done for the following purposes –
1. Strategic planning using facts provided in Testin: Partnering with Multinational Corporations case study
2. Improving business portfolio management of Testin Prashantham
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 Testin Prashantham
Strengths Testin: Partnering with Multinational Corporations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Testin Prashantham in Testin: Partnering with Multinational Corporations Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Testin: Partnering with Multinational Corporations 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 recruit top talent
– Testin Prashantham is one of the leading recruiters in the industry. Managers in the Testin: Partnering with Multinational Corporations are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Testin Prashantham is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Testin Prashantham
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Testin Prashantham does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Testin Prashantham has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Testin Prashantham to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Innovation & Entrepreneurship field
– Testin Prashantham 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 Testin Prashantham 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
– Testin Prashantham has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Testin Prashantham 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Testin: Partnering with Multinational Corporations firm has clearly differentiated products in the market place. This has enabled Testin Prashantham to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Testin Prashantham to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Testin Prashantham in the sector have low bargaining power. Testin: Partnering with Multinational Corporations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Testin Prashantham to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Testin Prashantham digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Testin Prashantham 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
- Testin Prashantham 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 Testin Prashantham is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Testin: Partnering with Multinational Corporations Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Testin Prashantham 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 Shameen Prashantham, Liman Zhao can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Testin: Partnering with Multinational Corporations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Testin: Partnering with Multinational Corporations are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Testin: Partnering with Multinational Corporations, is just above the industry average. Testin Prashantham 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.
Need for greater diversity
– Testin Prashantham 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.
Slow decision making process
– As mentioned earlier in the report, Testin Prashantham 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. Testin Prashantham 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Testin: Partnering with Multinational Corporations 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 Testin Prashantham has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Testin: Partnering with Multinational Corporations 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 Testin Prashantham 's lucrative customers.
Lack of clear differentiation of Testin Prashantham products
– To increase the profitability and margins on the products, Testin Prashantham needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Testin: Partnering with Multinational Corporations HBR case study mentions - Testin Prashantham takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Testin Prashantham 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.
Skills based hiring
– The stress on hiring functional specialists at Testin Prashantham has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Testin Prashantham 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 - Testin: Partnering with Multinational Corporations should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Testin Prashantham is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Testin: Partnering with Multinational Corporations 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 Testin: Partnering with Multinational Corporations | 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 Testin: Partnering with Multinational Corporations are -
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 Testin Prashantham 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.
Manufacturing automation
– Testin Prashantham can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Leveraging digital technologies
– Testin Prashantham 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.
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 Testin Prashantham in the consumer business. Now Testin Prashantham can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Testin Prashantham has opened avenues for new revenue streams for the organization in the industry. This can help Testin Prashantham to build a more holistic ecosystem as suggested in the Testin: Partnering with Multinational Corporations case study. Testin Prashantham can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Testin Prashantham 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.
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. Testin Prashantham can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Testin Prashantham can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Testin: Partnering with Multinational Corporations 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Testin Prashantham 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 Testin Prashantham 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Testin Prashantham in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Testin Prashantham 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 Testin Prashantham to hire the very best people irrespective of their geographical location.
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. Testin Prashantham 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. Testin Prashantham 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 Testin: Partnering with Multinational Corporations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Testin: Partnering with Multinational Corporations 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.
Stagnating economy with rate increase
– Testin Prashantham 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.
High dependence on third party suppliers
– Testin Prashantham 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.
Consumer confidence and its impact on Testin Prashantham 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 Testin Prashantham is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Testin Prashantham 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 Testin: Partnering with Multinational Corporations .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Testin Prashantham 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Testin Prashantham needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Testin Prashantham.
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 Testin Prashantham in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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. Testin Prashantham can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Testin: Partnering with Multinational Corporations, Testin Prashantham 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 .
Weighted SWOT Analysis of Testin: Partnering with Multinational Corporations 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 Testin: Partnering with Multinational Corporations 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 Testin: Partnering with Multinational Corporations 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 Testin: Partnering with Multinational Corporations 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 Testin: Partnering with Multinational Corporations 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 Testin Prashantham needs to make to build a sustainable competitive advantage.
