Case Study Description of Flying the Coop: TeleSign's Incubator Exit
Ryan Disraeli, Darren Berkovitz, and Stacy Stubblefield co-founded TeleSign, an internet security company, while employees in an incubator called Curious Minds. After much iteration, they found themselves at the cutting edge of the fields of account security and dual authentication. They knew it was time to leave the incubator, but they struggled to figure out how to convince the incubator's CEO. Simultaneously, the team worked to gain equity in the company. They also considered various options to grow TeleSign, including taking outside investment and hiring a seasoned external CEO.
Swot Analysis of "Flying the Coop: TeleSign's Incubator Exit" written by Thomas Knapp, Jacqueline Orr includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Incubator Telesign facing as an external strategic factors. Some of the topics covered in Flying the Coop: TeleSign's Incubator Exit case study are - Strategic Management Strategies, Entrepreneurial management, Innovation, Managing uncertainty and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Flying the Coop: TeleSign's Incubator Exit casestudy better are - – increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , geopolitical disruptions, talent flight as more people leaving formal jobs,
increasing energy prices, wage bills are increasing, etc
Introduction to SWOT Analysis of Flying the Coop: TeleSign's Incubator Exit
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Flying the Coop: TeleSign's Incubator Exit case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Incubator Telesign, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Incubator Telesign 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 Flying the Coop: TeleSign's Incubator Exit can be done for the following purposes –
1. Strategic planning using facts provided in Flying the Coop: TeleSign's Incubator Exit case study
2. Improving business portfolio management of Incubator Telesign
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Incubator Telesign
Strengths Flying the Coop: TeleSign's Incubator Exit | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Incubator Telesign in Flying the Coop: TeleSign's Incubator Exit Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Incubator Telesign 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 Incubator Telesign 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 Flying the Coop: TeleSign's Incubator Exit 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
– Incubator Telesign is present in almost all the verticals within the industry. This has provided firm in Flying the Coop: TeleSign's Incubator Exit 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.
Strong track record of project management
– Incubator Telesign is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Incubator Telesign
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Incubator Telesign does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Incubator Telesign 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 Incubator Telesign is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Flying the Coop: TeleSign's Incubator Exit Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Incubator Telesign in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Incubator Telesign has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Incubator Telesign to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Incubator Telesign digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Incubator Telesign 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.
Effective Research and Development (R&D)
– Incubator Telesign 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 Flying the Coop: TeleSign's Incubator Exit - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Incubator Telesign 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Flying the Coop: TeleSign's Incubator Exit firm has clearly differentiated products in the market place. This has enabled Incubator Telesign to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Incubator Telesign to invest into research and development (R&D) and innovation.
Weaknesses Flying the Coop: TeleSign's Incubator Exit | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Flying the Coop: TeleSign's Incubator Exit are -
High cash cycle compare to competitors
Incubator Telesign 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.
Aligning sales with marketing
– It come across in the case study Flying the Coop: TeleSign's Incubator Exit 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 Flying the Coop: TeleSign's Incubator Exit can leverage the sales team experience to cultivate customer relationships as Incubator Telesign is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Incubator Telesign 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Incubator Telesign is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Flying the Coop: TeleSign's Incubator Exit can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Flying the Coop: TeleSign's Incubator Exit, it seems that the employees of Incubator Telesign 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Flying the Coop: TeleSign's Incubator Exit, in the dynamic environment Incubator Telesign has struggled to respond to the nimble upstart competition. Incubator Telesign has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Incubator Telesign has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Flying the Coop: TeleSign's Incubator Exit should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Flying the Coop: TeleSign's Incubator Exit 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 Incubator Telesign 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas Knapp, Jacqueline Orr suggests that, Incubator Telesign is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Incubator Telesign 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.
Slow to strategic competitive environment developments
– As Flying the Coop: TeleSign's Incubator Exit HBR case study mentions - Incubator Telesign 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.
Opportunities Flying the Coop: TeleSign's Incubator Exit | 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 Flying the Coop: TeleSign's Incubator Exit are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Incubator Telesign can use these opportunities to build new business models that can help the communities that Incubator Telesign operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Incubator Telesign 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.
Better consumer reach
– The expansion of the 5G network will help Incubator Telesign to increase its market reach. Incubator Telesign 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.
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 Incubator Telesign 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Incubator Telesign can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Incubator Telesign has opened avenues for new revenue streams for the organization in the industry. This can help Incubator Telesign to build a more holistic ecosystem as suggested in the Flying the Coop: TeleSign's Incubator Exit case study. Incubator Telesign can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Incubator Telesign 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.
Developing new processes and practices
– Incubator Telesign can develop new processes and procedures in Leadership & Managing People 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.
Building a culture of innovation
– managers at Incubator Telesign 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 Leadership & Managing People segment.
Leveraging digital technologies
– Incubator Telesign 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.
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. Incubator Telesign can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Incubator Telesign 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, Flying the Coop: TeleSign's Incubator Exit, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Incubator Telesign can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Flying the Coop: TeleSign's Incubator Exit 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.
Threats Flying the Coop: TeleSign's Incubator Exit External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Flying the Coop: TeleSign's Incubator Exit are -
Stagnating economy with rate increase
– Incubator Telesign 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.
Environmental challenges
– Incubator Telesign 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. Incubator Telesign can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Incubator Telesign with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Flying the Coop: TeleSign's Incubator Exit, Incubator Telesign may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Shortening product life cycle
– it is one of the major threat that Incubator Telesign is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Incubator Telesign needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Incubator Telesign.
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.
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. Incubator Telesign 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Incubator Telesign in the Leadership & Managing People industry. The Leadership & Managing People 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 Incubator Telesign in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Incubator Telesign 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 Leadership & Managing People industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Incubator Telesign 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 Flying the Coop: TeleSign's Incubator Exit .
Weighted SWOT Analysis of Flying the Coop: TeleSign's Incubator Exit 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 Flying the Coop: TeleSign's Incubator Exit 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 Flying the Coop: TeleSign's Incubator Exit 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 Flying the Coop: TeleSign's Incubator Exit 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 Flying the Coop: TeleSign's Incubator Exit 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 Incubator Telesign needs to make to build a sustainable competitive advantage.