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 - – talent flight as more people leaving formal jobs, there is backlash against globalization, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing commodity prices, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
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.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Lycos Terra digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lycos Terra 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.
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.
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.
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.
High switching costs
– The high switching costs that Lycos Terra 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.
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.
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.
Superior customer experience
– The customer experience strategy of Lycos Terra in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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 -
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Terra Lycos: Profiting from Information Products 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 Lycos Terra has relatively successful track record of launching new products.
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.
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.
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.
Need for greater diversity
– Lycos Terra 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Terra Lycos: Profiting from Information Products 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 Lycos Terra 's lucrative customers.
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.
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.
Interest costs
– Compare to the competition, Lycos Terra 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lycos Terra is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Terra Lycos: Profiting from Information Products can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lycos Terra 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. Lycos Terra 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lycos Terra 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, Terra Lycos: Profiting from Information Products, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communication industry, but it has also influenced the consumer preferences. Lycos Terra can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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 Lycos Terra 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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Lycos Terra 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
– 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.
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 -
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.
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.
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. Lycos Terra 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.
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.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lycos Terra in the Communication industry. The Communication 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
– 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.
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.
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 .
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.
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 .
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.