Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
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 - – increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, 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.
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.
Analytics focus
– Ftc Covisint 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 Ali F. Farhoomand, Mary Ho, Phoebe Ho 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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Ftc Covisint are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Ftc Covisint is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Superior customer experience
– The customer experience strategy of Ftc Covisint in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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 -
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.
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.
Slow decision making process
– As mentioned earlier in the report, Ftc Covisint 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. Ftc Covisint 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, Ali F. Farhoomand, Mary Ho, Phoebe Ho suggests that, Ftc Covisint 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc., is just above the industry average. Ftc Covisint 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.
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.
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 cash cycle compare to competitors
Ftc Covisint 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 Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc., it seems that company is thinking about the frontier risks that can impact Global Business 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.
Low market penetration in new markets
– Outside its home market of Ftc Covisint, firm in the HBR case study Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Ftc Covisint 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.
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 -
Manufacturing automation
– Ftc Covisint can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ftc Covisint is facing challenges because of the dominance of functional experts in the organization. Anti-trust and Competitive Issues in B2B Trading Exchanges: Covisint, Inc. 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 Ftc Covisint 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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ftc Covisint 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.
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.
Better consumer reach
– The expansion of the 5G network will help Ftc Covisint to increase its market reach. Ftc Covisint 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ftc Covisint can use these opportunities to build new business models that can help the communities that Ftc Covisint operates in. Secondly it can use opportunities from government spending in Global Business sector.
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.
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.
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 -
Increasing wage structure of Ftc Covisint
– 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 Ftc Covisint.
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.
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. Ftc Covisint needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
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.
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.
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.
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.
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.
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.
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.
Stagnating economy with rate increase
– Ftc Covisint 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.
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. .
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.