Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth?
The case centers on Eyeo GmbH, a German software development company, whose main product is Adblock Plus, the world's leading ad blocking browser extension that blocks ads from appearing on the screens of individual users, both on desktops and mobile devices. Initially started as a hobby by Wladimir Palant in 2006, Adblock Plus has since been downloaded over one billion times and has helped drive, along with its competitors, the exponential use of ad block software, which numbered 380 million desktop users and 235 million mobile users, worldwide, by the start of 2017. Over its first 11 years, Eyeo -- as one of the five alliance members behind the 2014 Acceptable Ad Coalition Manifesto -- has seen itself as making the web a better experience for individual users by eliminating annoying and unwanted online ads, while its publishing industry critics -- to whom digital advertising revenue is a critical portion of their business model -- have denounced the ad blockers as "self-appointed hall monitors" of Internet advertising, setting the standards for acceptable ads and then requiring the mostly larger publishers to pay them a "whitelisting" fee, a form of "extortion". In response to ad blockers, publishers have prevented individual users of ad blocking software from visiting their site, sought to charge these users a subscription fee for access, or, in a few cases with several German media companies, even taking Eyeo to court, albeit unsuccessfully so far. Set in January 2018, the case asks which path Eyeo's three principal officers -- CTO Wladimir Palant, chairman Tim Schumacher, and CEO Till Faida -- should take the company in the future. Despite the past growth in Adblocker Plus usage and revenue, storm clouds are brewing. In recent years, as the number of global mobile phone users surpassed that of desktop users, it has become more challenging to install ad blocking software on mobile phones, compared to desktop browsers, since the individual operating systems and ecosystems of mobile phones are more tightly controlled by its overseers -- mainly Apple iPhone or Google Android. Then in December 2017, Google had announced that its popular desktop Chrome browser would now automatically block out various types of annoying ads as determined by its own Coalition for Better Ads.
Swot Analysis of "Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth?" written by Zsolt Katona, Miklos Sarvary includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ad Users facing as an external strategic factors. Some of the topics covered in Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? case study are - Strategic Management Strategies, Disruptive innovation, Entrepreneurship, Marketing, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? casestudy better are - – increasing transportation and logistics costs, there is increasing trade war between United States & China, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices,
supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ad Users, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ad Users 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 Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? can be done for the following purposes –
1. Strategic planning using facts provided in Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? case study
2. Improving business portfolio management of Ad Users
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ad Users
Strengths Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ad Users in Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? firm has clearly differentiated products in the market place. This has enabled Ad Users to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ad Users to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Ad Users 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.
Analytics focus
– Ad Users 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 Zsolt Katona, Miklos Sarvary 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ad Users digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ad Users 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.
Diverse revenue streams
– Ad Users is present in almost all the verticals within the industry. This has provided firm in Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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.
High switching costs
– The high switching costs that Ad Users has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Ad Users in the sector have low bargaining power. Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ad Users to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Ad Users is one of the most innovative firm in sector. Manager in Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Ad Users 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 Ad Users is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Ad Users has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ad Users 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.
High brand equity
– Ad Users has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ad Users to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Ad Users is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? are -
Slow to strategic competitive environment developments
– As Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? HBR case study mentions - Ad Users 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.
No frontier risks strategy
– After analyzing the HBR case study Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth?, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Zsolt Katona, Miklos Sarvary suggests that, Ad Users 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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 Ad Users has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Ad Users is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ad Users needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ad Users to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Ad Users needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ad Users supply chain. Even after few cautionary changes mentioned in the HBR case study - Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ad Users vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Ad Users has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Ad Users, firm in the HBR case study Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth?, is just above the industry average. Ad Users 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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 Ad Users 's lucrative customers.
Opportunities Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? | 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 Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? are -
Buying journey improvements
– Ad Users can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ad Users in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution 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 Ad Users 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 Ad Users to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Ad Users has opened avenues for new revenue streams for the organization in the industry. This can help Ad Users to build a more holistic ecosystem as suggested in the Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? case study. Ad Users can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Ad Users can use these opportunities to build new business models that can help the communities that Ad Users operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Ad Users can develop new processes and procedures in Strategy & Execution 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.
Better consumer reach
– The expansion of the 5G network will help Ad Users to increase its market reach. Ad Users 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ad Users 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.
Using analytics as competitive advantage
– Ad Users 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 Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ad Users 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 Ad Users in the consumer business. Now Ad Users can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Ad Users can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ad Users is facing challenges because of the dominance of functional experts in the organization. Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ad Users 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, Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ad Users with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ad Users in the Strategy & Execution industry. The Strategy & Execution 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.
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ad Users can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Ad Users
– 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 Ad Users.
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. Ad Users needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Ad Users 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.
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 Ad Users in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Ad Users has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ad Users needs to keep up with the evolution of technology in the Strategy & Execution 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.
Stagnating economy with rate increase
– Ad Users 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
– Ad Users 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.
Regulatory challenges
– Ad Users 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 Strategy & Execution 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 Ad Users.
Weighted SWOT Analysis of Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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 Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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 Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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 Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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 Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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 Ad Users needs to make to build a sustainable competitive advantage.
