Clover Network's founders didn't see the curveball coming at the end of 2012. The two-year-old start-up had just nine employees. It had dumped its first business idea, pivoted from its second, and was working hard on a new product: a tablet-based cash register with built-in credit card processing. Large credit card payment processing companies had started noticing Clover and one had just agreed to pre-order $2 million of Clover hardware. It was Clover's first such deal. But around Thanksgiving, Clover learned that First Data-the card processing industry's 800-pound gorilla-also was interested in Clover's technology. If it could bring First Data on as a customer, Clover would have a pipeline to a huge number of retailers. In early December, one of Clover's founders received a 2?-page letter from First Data. He had expected a proposal to buy and distribute Clover equipment, maybe with a small equity investment. Instead, First Data said it wanted to acquire "no less than 75 percent" of Clover, and close the deal by December 31. Was it time to sell Clover? The case highlights how a start-up decides to respond to an unexpected buyout offer and how it proposes to structure the deal.
Authors :: Julie Makinen, Mike Speiser, Mark Leslie
Swot Analysis of "Clover (A)" written by Julie Makinen, Mike Speiser, Mark Leslie includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Clover Clover's facing as an external strategic factors. Some of the topics covered in Clover (A) case study are - Strategic Management Strategies, Mergers & acquisitions, Motivating people, Negotiations, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Clover (A) casestudy better are - – geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing transportation and logistics costs,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Clover (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Clover Clover's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Clover Clover's 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 Clover (A) can be done for the following purposes –
1. Strategic planning using facts provided in Clover (A) case study
2. Improving business portfolio management of Clover Clover's
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 Clover Clover's
Strengths Clover (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Clover Clover's in Clover (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Clover (A) 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.
Innovation driven organization
– Clover Clover's is one of the most innovative firm in sector. Manager in Clover (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Clover Clover's 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 Julie Makinen, Mike Speiser, Mark Leslie 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.
Strong track record of project management
– Clover Clover's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Clover Clover's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Clover Clover's 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.
Organizational Resilience of Clover Clover's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Clover Clover's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Clover Clover's is one of the leading recruiters in the industry. Managers in the Clover (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Clover Clover's is present in almost all the verticals within the industry. This has provided firm in Clover (A) 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.
Low bargaining power of suppliers
– Suppliers of Clover Clover's in the sector have low bargaining power. Clover (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Clover Clover's to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Clover Clover's 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 Clover (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Clover Clover's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Clover Clover's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Clover (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Clover (A) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Clover (A) 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 Clover Clover's has relatively successful track record of launching new products.
Need for greater diversity
– Clover Clover's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Clover Clover's 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 cash cycle compare to competitors
Clover Clover's 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.
Interest costs
– Compare to the competition, Clover Clover's 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.
Aligning sales with marketing
– It come across in the case study Clover (A) 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 Clover (A) can leverage the sales team experience to cultivate customer relationships as Clover Clover's is planning to shift buying processes online.
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 Clover Clover's supply chain. Even after few cautionary changes mentioned in the HBR case study - Clover (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Clover Clover's vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Clover Clover's, firm in the HBR case study Clover (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Clover Clover's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Clover (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Clover (A) 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 Clover Clover's 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Clover (A), in the dynamic environment Clover Clover's has struggled to respond to the nimble upstart competition. Clover Clover's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Clover (A) | 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 Clover (A) are -
Learning at scale
– Online learning technologies has now opened space for Clover Clover's 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, Clover Clover's is facing challenges because of the dominance of functional experts in the organization. Clover (A) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Clover Clover's 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 Clover Clover's to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Clover Clover's 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, Clover (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Clover Clover's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Clover Clover's 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 Strategy & Execution segment.
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 Clover Clover's in the consumer business. Now Clover Clover's can target international markets with far fewer capital restrictions requirements than the existing system.
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. Clover Clover's 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. Clover Clover's 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.
Using analytics as competitive advantage
– Clover Clover's 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 Clover (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Clover Clover's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Clover Clover's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Clover (A) 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.
Developing new processes and practices
– Clover Clover's 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.
Creating value in data economy
– The success of analytics program of Clover Clover's has opened avenues for new revenue streams for the organization in the industry. This can help Clover Clover's to build a more holistic ecosystem as suggested in the Clover (A) case study. Clover Clover's 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, Clover Clover's can use these opportunities to build new business models that can help the communities that Clover Clover's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Clover (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Clover (A) are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Clover Clover's 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.
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 Clover Clover's in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Clover Clover's 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. Clover Clover's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Clover Clover's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Clover Clover's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Clover Clover's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Clover (A), Clover Clover's 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 .
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 Clover Clover's.
High dependence on third party suppliers
– Clover Clover's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Clover Clover's 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 Clover (A) .
Increasing wage structure of Clover Clover's
– 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 Clover Clover's.
Consumer confidence and its impact on Clover Clover's 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.
Technology acceleration in Forth Industrial Revolution
– Clover Clover's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Clover Clover's 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.
Weighted SWOT Analysis of Clover (A) 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 Clover (A) 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 Clover (A) 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 Clover (A) 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 Clover (A) 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 Clover Clover's needs to make to build a sustainable competitive advantage.
