Terra Lycos: Profiting from Information Products SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Communication
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Terra Lycos: Profiting from Information Products
The case discusses how Terra Lycos is reshaping itself during the economic slowdown by diversifying its revenue stream and attempting to start selling products once offered for free. As a portal, Terra Lycos' products were, by nature, mainly information based. Can Terra Lycos succeed in transforming its products from free to pay?
Swot Analysis of "Terra Lycos: Profiting from Information Products" written by Theodoros Theos Evgeniou includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lycos Terra facing as an external strategic factors. Some of the topics covered in Terra Lycos: Profiting from Information Products case study are - Strategic Management Strategies, and Communication.
Some of the macro environment factors that can be used to understand the Terra Lycos: Profiting from Information Products casestudy better are - – increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Terra Lycos: Profiting from Information Products
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Terra Lycos: Profiting from Information Products case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lycos Terra, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lycos Terra 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 Terra Lycos: Profiting from Information Products can be done for the following purposes –
1. Strategic planning using facts provided in Terra Lycos: Profiting from Information Products case study
2. Improving business portfolio management of Lycos Terra
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lycos Terra
Strengths Terra Lycos: Profiting from Information Products | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lycos Terra in Terra Lycos: Profiting from Information Products Harvard Business Review case study are -
Diverse revenue streams
– Lycos Terra is present in almost all the verticals within the industry. This has provided firm in Terra Lycos: Profiting from Information Products 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.
Innovation driven organization
– Lycos Terra is one of the most innovative firm in sector. Manager in Terra Lycos: Profiting from Information Products Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Lycos Terra has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lycos Terra to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Lycos Terra is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Lycos Terra 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 Terra Lycos: Profiting from Information Products HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Communication field
– Lycos Terra 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 Lycos Terra in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Communication industry
– Terra Lycos: Profiting from Information Products firm has clearly differentiated products in the market place. This has enabled Lycos Terra to fetch slight price premium compare to the competitors in the Communication industry. The sustainable margins have also helped Lycos Terra to invest into research and development (R&D) and innovation.
Analytics focus
– Lycos Terra 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 Theodoros Theos Evgeniou 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.
Successful track record of launching new products
– Lycos Terra has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lycos Terra has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Learning organization
- Lycos Terra 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 Lycos Terra is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Terra Lycos: Profiting from Information Products Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Lycos Terra has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Terra Lycos: Profiting from Information Products 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.
Operational resilience
– The operational resilience strategy in the Terra Lycos: Profiting from Information Products 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.
Weaknesses Terra Lycos: Profiting from Information Products | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Terra Lycos: Profiting from Information Products are -
Low market penetration in new markets
– Outside its home market of Lycos Terra, firm in the HBR case study Terra Lycos: Profiting from Information Products needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Lycos Terra products
– To increase the profitability and margins on the products, Lycos Terra needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Lycos Terra has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Lycos Terra 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. Lycos Terra 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Theodoros Theos Evgeniou suggests that, Lycos Terra 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.
High cash cycle compare to competitors
Lycos Terra 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.
No frontier risks strategy
– After analyzing the HBR case study Terra Lycos: Profiting from Information Products, it seems that company is thinking about the frontier risks that can impact Communication 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.
Products dominated business model
– Even though Lycos Terra 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 - Terra Lycos: Profiting from Information Products should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Lycos Terra 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Lycos Terra 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Terra Lycos: Profiting from Information Products, is just above the industry average. Lycos Terra 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.
Opportunities Terra Lycos: Profiting from Information Products | 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 Terra Lycos: Profiting from Information Products are -
Developing new processes and practices
– Lycos Terra can develop new processes and procedures in Communication 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.
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 Lycos Terra in the consumer business. Now Lycos Terra can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Lycos Terra 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 Communication segment.
Using analytics as competitive advantage
– Lycos Terra 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 Terra Lycos: Profiting from Information Products - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lycos Terra to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Lycos Terra 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lycos Terra 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.
Manufacturing automation
– Lycos Terra can use the latest technology developments to improve its manufacturing and designing process in Communication 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lycos Terra in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communication segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Lycos Terra has opened avenues for new revenue streams for the organization in the industry. This can help Lycos Terra to build a more holistic ecosystem as suggested in the Terra Lycos: Profiting from Information Products case study. Lycos Terra can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Lycos Terra 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 Lycos Terra to increase its market reach. Lycos Terra 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lycos Terra is facing challenges because of the dominance of functional experts in the organization. Terra Lycos: Profiting from Information Products 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.
Buying journey improvements
– Lycos Terra can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Terra Lycos: Profiting from Information Products 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 Terra Lycos: Profiting from Information Products External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Terra Lycos: Profiting from Information Products are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lycos Terra 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 Terra Lycos: Profiting from Information Products .
Environmental challenges
– Lycos Terra 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. Lycos Terra can take advantage of this fund but it will also bring new competitors in the Communication industry.
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. Lycos Terra needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Lycos Terra 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.
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 Lycos Terra.
Increasing wage structure of Lycos Terra
– 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 Lycos Terra.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lycos Terra with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Lycos Terra business can come under increasing regulations regarding data privacy, data security, etc.
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 Lycos Terra in the Communication sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Terra Lycos: Profiting from Information Products, Lycos Terra may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
Shortening product life cycle
– it is one of the major threat that Lycos Terra is facing in Communication sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Lycos Terra 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 Communication industry regulations.
Technology acceleration in Forth Industrial Revolution
– Lycos Terra has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Lycos Terra needs to keep up with the evolution of technology in the Communication 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 Terra Lycos: Profiting from Information Products 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 Terra Lycos: Profiting from Information Products 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 Terra Lycos: Profiting from Information Products 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 Terra Lycos: Profiting from Information Products 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 Terra Lycos: Profiting from Information Products 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 Lycos Terra needs to make to build a sustainable competitive advantage.