Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc.
In February 2000, DaimlerChrysler, Ford Motor Co., and General Motors Co. jointly announced plans to combine efforts and form a global online business-to-business (B2B) exchange. The goal of the exchange was to provide original equipment manufacturers and suppliers with the ability to reduce costs in their respective supply chains and bring efficiencies to their business operations. A few months after the announcement, Renault S.A., Nissan Japan, and several top-tier automotive parts suppliers voiced their support and planned to join the exchange. The founders coined the name "Covisint" for the exchange. In July 2000, the Federal Trade Commission (FTC) in Washington, DC launched an investigation into Covisint's structure and mission, to explore any possible antitrust implications. The FTC was aware that Covisint's founders represented a large share of the automotive market. Given the influence of the big players, the FTC feared that small companies could be excluded from the market and that the exchange could provide a channel for the improper transfer of sensitive information among the participants. Covisint was the first B2B venture to be reviewed by the FTC. The outcome of the case and the issues raised sparked widespread debate about how, or whether, the B2B industry should be regulated by antitrust provisions. The case also raised concerns from companies that intend to invest or participate in B2B trading platforms.
Swot Analysis of "Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc." written by Ali F. Farhoomand, Mary Ho, Phoebe Ho includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ftc Covisint facing as an external strategic factors. Some of the topics covered in Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. case study are - Strategic Management Strategies, Business models, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. casestudy better are - – talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ftc Covisint, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ftc Covisint 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. case study
2. Improving business portfolio management of Ftc Covisint
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ftc Covisint
Strengths Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ftc Covisint in Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. Harvard Business Review case study are -
Effective Research and Development (R&D)
– Ftc Covisint 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Ftc Covisint is present in almost all the verticals within the industry. This has provided firm in Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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.
Successful track record of launching new products
– Ftc Covisint has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ftc Covisint 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.
Organizational Resilience of Ftc Covisint
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ftc Covisint does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Global Business industry
– Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. firm has clearly differentiated products in the market place. This has enabled Ftc Covisint to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Ftc Covisint to invest into research and development (R&D) and innovation.
Ability to lead change in Global Business field
– Ftc Covisint 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 Ftc Covisint in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Ftc Covisint has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ftc Covisint to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Ftc Covisint 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.
Learning organization
- Ftc Covisint 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 Ftc Covisint is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Ftc Covisint is one of the most innovative firm in sector. Manager in Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Global Business segment
- digital transformation varies from industry to industry. For Ftc Covisint digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ftc Covisint 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.
Ability to recruit top talent
– Ftc Covisint is one of the leading recruiters in the industry. Managers in the Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. are -
Workers concerns about automation
– As automation is fast increasing in the segment, Ftc Covisint 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Ftc Covisint has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc., in the dynamic environment Ftc Covisint has struggled to respond to the nimble upstart competition. Ftc Covisint has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Ftc Covisint 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ftc Covisint is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. can leverage the sales team experience to cultivate customer relationships as Ftc Covisint is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Ftc Covisint 's lucrative customers.
Lack of clear differentiation of Ftc Covisint products
– To increase the profitability and margins on the products, Ftc Covisint needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Ftc Covisint supply chain. Even after few cautionary changes mentioned in the HBR case study - Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ftc Covisint vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Ftc Covisint 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.
Products dominated business model
– Even though Ftc Covisint 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 - Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. should strive to include more intangible value offerings along with its core products and services.
Opportunities Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. | 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ftc Covisint 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. Ftc Covisint 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ftc Covisint 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, Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Ftc Covisint can develop new processes and procedures in Global Business 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ftc Covisint can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Ftc Covisint 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.
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 Ftc Covisint in the consumer business. Now Ftc Covisint can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Ftc Covisint can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Ftc Covisint 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ftc Covisint in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Ftc Covisint 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ftc Covisint to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Ftc Covisint 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.
Building a culture of innovation
– managers at Ftc Covisint 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 Global Business segment.
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. Ftc Covisint can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. are -
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. Ftc Covisint 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ftc Covisint can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Ftc Covisint is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Ftc Covisint 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. Ftc Covisint can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ftc Covisint 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. .
Regulatory challenges
– Ftc Covisint 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 Global Business industry regulations.
Consumer confidence and its impact on Ftc Covisint 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.
Technology acceleration in Forth Industrial Revolution
– Ftc Covisint has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Ftc Covisint needs to keep up with the evolution of technology in the Global Business 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.
High dependence on third party suppliers
– Ftc Covisint 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Ftc Covisint in the Global Business sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ftc Covisint in the Global Business industry. The Global Business 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ftc Covisint with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Ftc Covisint needs to make to build a sustainable competitive advantage.