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 - – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, wage bills are increasing, 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 -
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.
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.
Effective Research and Development (R&D)
– Ad Users 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 Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– 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.
Superior customer experience
– The customer experience strategy of Ad Users in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Ad Users has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Ad Users
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ad Users does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Ability to lead change in Strategy & Execution field
– Ad Users 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 Ad Users in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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 -
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.
Aligning sales with marketing
– It come across in the case study Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? 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 Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth? can leverage the sales team experience to cultivate customer relationships as Ad Users is planning to shift buying processes online.
High cash cycle compare to competitors
Ad Users has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Ad Users products
– To increase the profitability and margins on the products, Ad Users needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth?, it seems that the employees of Ad Users 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.
Skills based hiring
– The stress on hiring functional specialists at Ad Users 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.
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.
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.
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.
Need for greater diversity
– Ad Users 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.
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.
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 -
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 Ad Users 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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ad Users can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ad Users 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. Ad Users 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.
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.
Loyalty marketing
– Ad Users 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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Ad Users 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.
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.
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 -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ad Users business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Shortening product life cycle
– it is one of the major threat that Ad Users is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Consumer confidence and its impact on Ad Users 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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Eyeo's Adblock Plus: Consumer Movement or Advertising Toll Booth?, Ad Users may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.
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.
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.