The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft
As of early 2018, five U.S. technology companies-Google, Apple, Facebook, Amazon, and Microsoft-were among the largest companies in the world. Similarly, three Chinese technology firms-Baidu, Alibaba, and Tencent, or BAT-had emerged as global players due in part to the protection of China's "Great Firewall," which made it more difficult for foreign companies to compete in Chinese markets. As these companies continued to scale by branching into new businesses, such as voice AI and self-driving vehicles, they also faced new and challenging questions about user privacy. The European Union had recently passed the General Data Protection Regulation, a comprehensive set of consumer data protection laws that would require technology companies to make significant changes to their operating model. Meanwhile, social media giant Facebook was facing allegations that Cambridge Analytica, a political data firm, had accessed information on tens of millions of Facebook users without their consent, prompting calls for big technology firms to be more strictly regulated. How would the five U.S. companies and BAT respond to these concerns? And looking forward, in what ways would these big companies compete with one another, and which would come out ahead?
Authors :: Jeffrey Rayport, Julia Kelley, Nathaniel Schwalb
Swot Analysis of "The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft" written by Jeffrey Rayport, Julia Kelley, Nathaniel Schwalb includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Facebook Bat facing as an external strategic factors. Some of the topics covered in The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft casestudy better are - – increasing household debt because of falling income levels, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, competitive advantages are harder to sustain because of technology dispersion,
wage bills are increasing, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Facebook Bat, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Facebook Bat 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft can be done for the following purposes –
1. Strategic planning using facts provided in The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft case study
2. Improving business portfolio management of Facebook Bat
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 Facebook Bat
Strengths The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Facebook Bat in The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Facebook Bat in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Facebook Bat has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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.
High switching costs
– The high switching costs that Facebook Bat 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.
Ability to recruit top talent
– Facebook Bat is one of the leading recruiters in the industry. Managers in the The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Facebook Bat has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Facebook Bat to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Facebook Bat 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 Facebook Bat is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Facebook Bat 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Innovation & Entrepreneurship field
– Facebook Bat 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 Facebook Bat in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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.
Diverse revenue streams
– Facebook Bat is present in almost all the verticals within the industry. This has provided firm in The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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.
Cross disciplinary teams
– Horizontal connected teams at the Facebook Bat are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Facebook Bat has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft are -
High operating costs
– Compare to the competitors, firm in the HBR case study The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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 Facebook Bat 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Facebook Bat, firm in the HBR case study The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft, is just above the industry average. Facebook Bat 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.
No frontier risks strategy
– After analyzing the HBR case study The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Skills based hiring
– The stress on hiring functional specialists at Facebook Bat 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.
Slow decision making process
– As mentioned earlier in the report, Facebook Bat 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. Facebook Bat 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.
Increasing silos among functional specialists
– The organizational structure of Facebook Bat is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Facebook Bat needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Facebook Bat to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft can leverage the sales team experience to cultivate customer relationships as Facebook Bat is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft, it seems that the employees of Facebook Bat 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft HBR case study mentions - Facebook Bat 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.
Need for greater diversity
– Facebook Bat 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.
Opportunities The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft | 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft are -
Manufacturing automation
– Facebook Bat 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Facebook Bat can use these opportunities to build new business models that can help the communities that Facebook Bat operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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. Facebook Bat 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. Facebook Bat can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Facebook Bat has opened avenues for new revenue streams for the organization in the industry. This can help Facebook Bat to build a more holistic ecosystem as suggested in the The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft case study. Facebook Bat can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Facebook Bat 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.
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 Facebook Bat in the consumer business. Now Facebook Bat can target international markets with far fewer capital restrictions requirements than the existing system.
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. Facebook Bat can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Facebook Bat 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Facebook Bat to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Facebook Bat 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Facebook Bat can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Facebook Bat 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.
Better consumer reach
– The expansion of the 5G network will help Facebook Bat to increase its market reach. Facebook Bat 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Facebook Bat can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft are -
Increasing wage structure of Facebook Bat
– 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 Facebook Bat.
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 Facebook Bat in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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 Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Facebook Bat can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Facebook Bat 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Facebook Bat 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft .
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 Facebook Bat business can come under increasing regulations regarding data privacy, data security, etc.
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. Facebook Bat needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Facebook Bat 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 dependence on third party suppliers
– Facebook Bat 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft, Facebook Bat 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 .
Stagnating economy with rate increase
– Facebook Bat 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.
Weighted SWOT Analysis of The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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 The Powers That Be (Internet Edition): Google, Apple, Facebook, Amazon, and Microsoft 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 Facebook Bat needs to make to build a sustainable competitive advantage.
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