Magic Markers (B): Managing Credibility in Social Media SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Magic Markers (B): Managing Credibility in Social Media
Supplement to case W18081. Liliana Lopez Jimenez is affiliated with Universidad Externado de Colombia. Matthias A. Tietz is affiliated with IE Universidad.
Swot Analysis of "Magic Markers (B): Managing Credibility in Social Media" written by Liliana Lopez Jimenez, Matthias Tietz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Universidad Externado facing as an external strategic factors. Some of the topics covered in Magic Markers (B): Managing Credibility in Social Media case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Magic Markers (B): Managing Credibility in Social Media casestudy better are - – cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing energy prices, wage bills are increasing, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Magic Markers (B): Managing Credibility in Social Media
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Magic Markers (B): Managing Credibility in Social Media case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Universidad Externado, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Universidad Externado 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 Magic Markers (B): Managing Credibility in Social Media can be done for the following purposes –
1. Strategic planning using facts provided in Magic Markers (B): Managing Credibility in Social Media case study
2. Improving business portfolio management of Universidad Externado
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 Universidad Externado
Strengths Magic Markers (B): Managing Credibility in Social Media | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Universidad Externado in Magic Markers (B): Managing Credibility in Social Media Harvard Business Review case study are -
High brand equity
– Universidad Externado has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Universidad Externado to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Magic Markers (B): Managing Credibility in Social Media firm has clearly differentiated products in the market place. This has enabled Universidad Externado to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Universidad Externado to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Universidad Externado 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.
Organizational Resilience of Universidad Externado
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Universidad Externado does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Universidad Externado in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Universidad Externado 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 Magic Markers (B): Managing Credibility in Social Media - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Universidad Externado digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Universidad Externado 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
- Universidad Externado 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 Universidad Externado is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Magic Markers (B): Managing Credibility in Social Media Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Universidad Externado is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Universidad Externado is one of the leading recruiters in the industry. Managers in the Magic Markers (B): Managing Credibility in Social Media 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 Universidad Externado in the sector have low bargaining power. Magic Markers (B): Managing Credibility in Social Media has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Universidad Externado to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Universidad Externado is one of the most innovative firm in sector. Manager in Magic Markers (B): Managing Credibility in Social Media Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Magic Markers (B): Managing Credibility in Social Media | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Magic Markers (B): Managing Credibility in Social Media are -
Skills based hiring
– The stress on hiring functional specialists at Universidad Externado 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.
Low market penetration in new markets
– Outside its home market of Universidad Externado, firm in the HBR case study Magic Markers (B): Managing Credibility in Social Media needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Liliana Lopez Jimenez, Matthias Tietz suggests that, Universidad Externado 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.
Interest costs
– Compare to the competition, Universidad Externado 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.
Capital Spending Reduction
– Even during the low interest decade, Universidad Externado 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Magic Markers (B): Managing Credibility in Social Media, it seems that the employees of Universidad Externado don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Magic Markers (B): Managing Credibility in Social Media HBR case study mentions - Universidad Externado 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.
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 Universidad Externado supply chain. Even after few cautionary changes mentioned in the HBR case study - Magic Markers (B): Managing Credibility in Social Media, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Universidad Externado vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Universidad Externado products
– To increase the profitability and margins on the products, Universidad Externado needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Universidad Externado 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. Universidad Externado 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 Magic Markers (B): Managing Credibility in Social Media 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 Universidad Externado has relatively successful track record of launching new products.
Opportunities Magic Markers (B): Managing Credibility in Social Media | 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 Magic Markers (B): Managing Credibility in Social Media are -
Manufacturing automation
– Universidad Externado 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.
Better consumer reach
– The expansion of the 5G network will help Universidad Externado to increase its market reach. Universidad Externado 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.
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 Universidad Externado in the consumer business. Now Universidad Externado 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 Universidad Externado has opened avenues for new revenue streams for the organization in the industry. This can help Universidad Externado to build a more holistic ecosystem as suggested in the Magic Markers (B): Managing Credibility in Social Media case study. Universidad Externado can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Universidad Externado 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.
Using analytics as competitive advantage
– Universidad Externado 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 Magic Markers (B): Managing Credibility in Social Media - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Universidad Externado to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Universidad Externado can use these opportunities to build new business models that can help the communities that Universidad Externado operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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. Universidad Externado can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Universidad Externado 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.
Loyalty marketing
– Universidad Externado 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Universidad Externado 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Universidad Externado 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.
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 Universidad Externado 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.
Threats Magic Markers (B): Managing Credibility in Social Media External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Magic Markers (B): Managing Credibility in Social Media are -
Increasing wage structure of Universidad Externado
– 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 Universidad Externado.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Universidad Externado 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 Magic Markers (B): Managing Credibility in Social Media .
Regulatory challenges
– Universidad Externado 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.
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 Universidad Externado.
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. Universidad Externado 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.
High dependence on third party suppliers
– Universidad Externado 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.
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. Universidad Externado needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Universidad Externado in the Innovation & Entrepreneurship sector and impact the bottomline 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 Universidad Externado 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.
Shortening product life cycle
– it is one of the major threat that Universidad Externado is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Universidad Externado with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Universidad Externado 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. Universidad Externado can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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. Universidad Externado can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Magic Markers (B): Managing Credibility in Social Media 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 Magic Markers (B): Managing Credibility in Social Media 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 Magic Markers (B): Managing Credibility in Social Media 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 Magic Markers (B): Managing Credibility in Social Media 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 Magic Markers (B): Managing Credibility in Social Media 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 Universidad Externado needs to make to build a sustainable competitive advantage.
