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 energy prices, talent flight as more people leaving formal jobs, 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, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, there is increasing trade war between United States & China,
technology disruption, increasing transportation and logistics costs, 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 -
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.
Effective Research and Development (R&D)
– Lycos Terra 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 Terra Lycos: Profiting from Information Products - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
Organizational Resilience of Lycos Terra
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lycos Terra 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 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.
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.
Low bargaining power of suppliers
– Suppliers of Lycos Terra in the sector have low bargaining power. Terra Lycos: Profiting from Information Products has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lycos Terra to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
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 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 Lycos Terra supply chain. Even after few cautionary changes mentioned in the HBR case study - Terra Lycos: Profiting from Information Products, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lycos Terra vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Terra Lycos: Profiting from Information Products HBR case study mentions - Lycos Terra 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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Terra Lycos: Profiting from Information Products, in the dynamic environment Lycos Terra has struggled to respond to the nimble upstart competition. Lycos Terra has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
Aligning sales with marketing
– It come across in the case study Terra Lycos: Profiting from Information Products 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 Terra Lycos: Profiting from Information Products can leverage the sales team experience to cultivate customer relationships as Lycos Terra is planning to shift buying processes online.
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.
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 -
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.
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.
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.
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.
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.
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. Lycos Terra can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lycos Terra can use these opportunities to build new business models that can help the communities that Lycos Terra operates in. Secondly it can use opportunities from government spending in Communication sector.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lycos Terra can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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 .
High dependence on third party suppliers
– Lycos Terra high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lycos Terra can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.