Case Study Description of ServerVault: "Reliable, Secure, and Wicked Fast"
This is a Darden case study.In July 2000, two founders of this new Web-hosting company are contemplating raising $5 million to $15 million in a second-round financing from venture capitalists. The task for the student is to forecast the firm's cash receipts and disbursements in an effort to determine the firm's "burn rate," i.e., the rate of cash consumption and how long the financing will sustain the firm. The new economy setting of this case permits the instructor to extend well-known financial skills and concepts to an industry that attracts high student-interest. This case is ideally used in an introductory finance course as an early exercise in forecasting, modeling, sensitivity analysis, and interpretation. It can be a useful foundation for later classes in cash-flow estimation and valuation. This case presumes that the students have already been exposed to the structure and interpretation of the statement of cash flows (SOCF), and the relationship of the SOCF to the income statement and balance sheet. The case also may offer opportunities for interdisciplinary teaching with instructors in marketing and entrepreneurship.
Swot Analysis of "ServerVault: "Reliable, Secure, and Wicked Fast"" written by Robert F. Bruner, Chad Rynbrandt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Socf Cash facing as an external strategic factors. Some of the topics covered in ServerVault: "Reliable, Secure, and Wicked Fast" case study are - Strategic Management Strategies, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the ServerVault: "Reliable, Secure, and Wicked Fast" casestudy better are - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, central banks are concerned over increasing inflation, increasing commodity prices, there is backlash against globalization, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, etc
Introduction to SWOT Analysis of ServerVault: "Reliable, Secure, and Wicked Fast"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ServerVault: "Reliable, Secure, and Wicked Fast" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Socf Cash, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Socf Cash 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 ServerVault: "Reliable, Secure, and Wicked Fast" can be done for the following purposes –
1. Strategic planning using facts provided in ServerVault: "Reliable, Secure, and Wicked Fast" case study
2. Improving business portfolio management of Socf Cash
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Socf Cash
Strengths ServerVault: "Reliable, Secure, and Wicked Fast" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Socf Cash in ServerVault: "Reliable, Secure, and Wicked Fast" Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Socf Cash 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.
Organizational Resilience of Socf Cash
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Socf Cash does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Socf Cash 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.
Operational resilience
– The operational resilience strategy in the ServerVault: "Reliable, Secure, and Wicked Fast" 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.
High brand equity
– Socf Cash has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Socf Cash to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Socf Cash 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 Socf Cash is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ServerVault: "Reliable, Secure, and Wicked Fast" Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Socf Cash digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Socf Cash has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Socf Cash is present in almost all the verticals within the industry. This has provided firm in ServerVault: "Reliable, Secure, and Wicked Fast" 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.
Superior customer experience
– The customer experience strategy of Socf Cash in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Socf Cash in the sector have low bargaining power. ServerVault: "Reliable, Secure, and Wicked Fast" has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Socf Cash to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Socf Cash has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ServerVault: "Reliable, Secure, and Wicked Fast" 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.
Ability to lead change in Finance & Accounting field
– Socf Cash 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 Socf Cash in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses ServerVault: "Reliable, Secure, and Wicked Fast" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ServerVault: "Reliable, Secure, and Wicked Fast" are -
Interest costs
– Compare to the competition, Socf Cash 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.
Increasing silos among functional specialists
– The organizational structure of Socf Cash is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Socf Cash needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Socf Cash to focus more on services rather than just following the product oriented approach.
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 Socf Cash supply chain. Even after few cautionary changes mentioned in the HBR case study - ServerVault: "Reliable, Secure, and Wicked Fast", it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Socf Cash vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ServerVault: "Reliable, Secure, and Wicked Fast", it seems that the employees of Socf Cash 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 ServerVault: "Reliable, Secure, and Wicked Fast", in the dynamic environment Socf Cash has struggled to respond to the nimble upstart competition. Socf Cash has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study ServerVault: "Reliable, Secure, and Wicked Fast" 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 Socf Cash 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Socf Cash 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, Socf Cash is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ServerVault: "Reliable, Secure, and Wicked Fast" can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As ServerVault: "Reliable, Secure, and Wicked Fast" HBR case study mentions - Socf Cash 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ServerVault: "Reliable, Secure, and Wicked Fast", is just above the industry average. Socf Cash 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.
Lack of clear differentiation of Socf Cash products
– To increase the profitability and margins on the products, Socf Cash needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities ServerVault: "Reliable, Secure, and Wicked Fast" | 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 ServerVault: "Reliable, Secure, and Wicked Fast" are -
Developing new processes and practices
– Socf Cash can develop new processes and procedures in Finance & Accounting 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 Socf Cash has opened avenues for new revenue streams for the organization in the industry. This can help Socf Cash to build a more holistic ecosystem as suggested in the ServerVault: "Reliable, Secure, and Wicked Fast" case study. Socf Cash can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Socf Cash 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 Finance & Accounting segment.
Buying journey improvements
– Socf Cash can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ServerVault: "Reliable, Secure, and Wicked Fast" 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Socf Cash can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Socf Cash 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. Socf Cash 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Socf Cash is facing challenges because of the dominance of functional experts in the organization. ServerVault: "Reliable, Secure, and Wicked Fast" 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.
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. Socf Cash can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Socf Cash 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Socf Cash can use these opportunities to build new business models that can help the communities that Socf Cash operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Socf Cash in the consumer business. Now Socf Cash can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Socf Cash in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Socf Cash 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.
Threats ServerVault: "Reliable, Secure, and Wicked Fast" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ServerVault: "Reliable, Secure, and Wicked Fast" are -
Regulatory challenges
– Socf Cash 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 Finance & Accounting industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ServerVault: "Reliable, Secure, and Wicked Fast", Socf Cash may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Socf Cash with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Socf Cash 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.
Environmental challenges
– Socf Cash 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. Socf Cash can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Socf Cash in the Finance & Accounting industry. The Finance & Accounting 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.
Stagnating economy with rate increase
– Socf Cash 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.
Technology acceleration in Forth Industrial Revolution
– Socf Cash has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Socf Cash needs to keep up with the evolution of technology in the Finance & Accounting 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.
Increasing wage structure of Socf Cash
– 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 Socf Cash.
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. Socf Cash needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Socf Cash in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Socf Cash 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.
Weighted SWOT Analysis of ServerVault: "Reliable, Secure, and Wicked Fast" 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 ServerVault: "Reliable, Secure, and Wicked Fast" 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 ServerVault: "Reliable, Secure, and Wicked Fast" 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 ServerVault: "Reliable, Secure, and Wicked Fast" 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 ServerVault: "Reliable, Secure, and Wicked Fast" 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 Socf Cash needs to make to build a sustainable competitive advantage.
