Thriving in an Increasingly Digital Ecosystem SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Thriving in an Increasingly Digital Ecosystem
This is an MIT Sloan Management Review article. The business world is rapidly digitizing, breaking down industry barriers and creating new opportunities while destroying long-successful business models. Given the amount of turmoil digital disruption is causing, authors Peter Weill and Stephanie L. Woerner of the MIT Center for Information Systems Research say it's time for companies to evaluate these threats and opportunities and create new business options for the more-connected future of digital ecosystems. In recent research, board members at large companies estimated that 32% of their company's revenue would be under threat from digital disruption in the next five years; 60% of board members felt their boards should spend significantly more time on this issue next year. Despite the threats from companies including Uber, Airbnb and Amazon, increasing digitization offers opportunities for companies to leverage strong customer relationships and increase cross-selling, the authors argue. The authors offer a framework, supported by examples, for helping managers think about their competitive environments. "The combination of moving from value chains to ecosystems and increasing consumer knowledge,"the authors write, "provides business leaders with four distinct business models, each with associated capabilities and relationships."Companies can choose to operate as (1) suppliers, (2) omnichannel businesses, (3) modular producers or (4) ecosystem drivers. The authors found that businesses focused narrowly on value chains were at a disadvantage compared with those that thought more broadly about their business ecosystems. Companies that had 50% or more of their revenues from digital ecosystems and understood their end customers better than their average competitor saw 32% higher revenue growth and 27% higher profit margins than their industry averages. As they prepare for growing digital disruption, companies have two major decisions to make. First, they need to decide the extent to which they want to control the value chain or become part of a more complex ecosystem. Second, they need to decide how much they want to invest in knowing their end customers. Companies with ecosystem drivers as their dominant business model had the highest margins and growth of all the four options in the companies the authors studied.
Swot Analysis of "Thriving in an Increasingly Digital Ecosystem" written by Peter Weill, Stephanie Woerner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ecosystems Authors facing as an external strategic factors. Some of the topics covered in Thriving in an Increasingly Digital Ecosystem case study are - Strategic Management Strategies, Disruptive innovation, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the Thriving in an Increasingly Digital Ecosystem casestudy better are - – talent flight as more people leaving formal jobs, technology disruption, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing energy prices,
there is backlash against globalization, geopolitical disruptions, etc
Introduction to SWOT Analysis of Thriving in an Increasingly Digital Ecosystem
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Thriving in an Increasingly Digital Ecosystem case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ecosystems Authors, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ecosystems Authors 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 Thriving in an Increasingly Digital Ecosystem can be done for the following purposes –
1. Strategic planning using facts provided in Thriving in an Increasingly Digital Ecosystem case study
2. Improving business portfolio management of Ecosystems Authors
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 Ecosystems Authors
Strengths Thriving in an Increasingly Digital Ecosystem | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ecosystems Authors in Thriving in an Increasingly Digital Ecosystem Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Ecosystems Authors in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Ecosystems Authors in the sector have low bargaining power. Thriving in an Increasingly Digital Ecosystem has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ecosystems Authors to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Ecosystems Authors is one of the leading recruiters in the industry. Managers in the Thriving in an Increasingly Digital Ecosystem are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Ecosystems Authors 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 Peter Weill, Stephanie Woerner 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.
Effective Research and Development (R&D)
– Ecosystems Authors 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 Thriving in an Increasingly Digital Ecosystem - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Ecosystems Authors has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ecosystems Authors 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.
High brand equity
– Ecosystems Authors has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ecosystems Authors to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Ecosystems Authors 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 Thriving in an Increasingly Digital Ecosystem HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Ecosystems Authors is present in almost all the verticals within the industry. This has provided firm in Thriving in an Increasingly Digital Ecosystem 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
- Ecosystems Authors 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 Ecosystems Authors is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Thriving in an Increasingly Digital Ecosystem Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Ecosystems Authors digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ecosystems Authors 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.
Cross disciplinary teams
– Horizontal connected teams at the Ecosystems Authors 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.
Weaknesses Thriving in an Increasingly Digital Ecosystem | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Thriving in an Increasingly Digital Ecosystem are -
Low market penetration in new markets
– Outside its home market of Ecosystems Authors, firm in the HBR case study Thriving in an Increasingly Digital Ecosystem needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Thriving in an Increasingly Digital Ecosystem, in the dynamic environment Ecosystems Authors has struggled to respond to the nimble upstart competition. Ecosystems Authors has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Ecosystems Authors 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 Ecosystems Authors products
– To increase the profitability and margins on the products, Ecosystems Authors 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 Ecosystems Authors supply chain. Even after few cautionary changes mentioned in the HBR case study - Thriving in an Increasingly Digital Ecosystem, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ecosystems Authors vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Ecosystems Authors is dominated by functional specialists. It is not different from other players in the Global Business segment. Ecosystems Authors needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ecosystems Authors to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Ecosystems Authors 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. Ecosystems Authors 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.
Interest costs
– Compare to the competition, Ecosystems Authors 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Thriving in an Increasingly Digital Ecosystem, is just above the industry average. Ecosystems Authors 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.
Aligning sales with marketing
– It come across in the case study Thriving in an Increasingly Digital Ecosystem 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 Thriving in an Increasingly Digital Ecosystem can leverage the sales team experience to cultivate customer relationships as Ecosystems Authors is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Thriving in an Increasingly Digital Ecosystem 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 Ecosystems Authors has relatively successful track record of launching new products.
Opportunities Thriving in an Increasingly Digital Ecosystem | 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 Thriving in an Increasingly Digital Ecosystem are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ecosystems Authors can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ecosystems Authors 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.
Better consumer reach
– The expansion of the 5G network will help Ecosystems Authors to increase its market reach. Ecosystems Authors 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.
Leveraging digital technologies
– Ecosystems Authors 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ecosystems Authors can use these opportunities to build new business models that can help the communities that Ecosystems Authors operates in. Secondly it can use opportunities from government spending in Global Business sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ecosystems Authors 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, Thriving in an Increasingly Digital Ecosystem, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Ecosystems Authors 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ecosystems Authors to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ecosystems Authors to hire the very best people irrespective of their geographical location.
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 Ecosystems Authors in the consumer business. Now Ecosystems Authors can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Ecosystems Authors 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.
Using analytics as competitive advantage
– Ecosystems Authors 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 Thriving in an Increasingly Digital Ecosystem - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ecosystems Authors 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 Global Business industry, but it has also influenced the consumer preferences. Ecosystems Authors can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Ecosystems Authors can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Thriving in an Increasingly Digital Ecosystem suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Thriving in an Increasingly Digital Ecosystem External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Thriving in an Increasingly Digital Ecosystem are -
Shortening product life cycle
– it is one of the major threat that Ecosystems Authors is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Ecosystems Authors business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Ecosystems Authors 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.
Increasing wage structure of Ecosystems Authors
– 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 Ecosystems Authors.
Environmental challenges
– Ecosystems Authors 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. Ecosystems Authors can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
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. Ecosystems Authors can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ecosystems Authors 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.
Technology acceleration in Forth Industrial Revolution
– Ecosystems Authors has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Ecosystems Authors 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.
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 Ecosystems Authors.
High dependence on third party suppliers
– Ecosystems Authors 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ecosystems Authors with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Ecosystems Authors 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.
Weighted SWOT Analysis of Thriving in an Increasingly Digital Ecosystem 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 Thriving in an Increasingly Digital Ecosystem 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 Thriving in an Increasingly Digital Ecosystem 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 Thriving in an Increasingly Digital Ecosystem 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 Thriving in an Increasingly Digital Ecosystem 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 Ecosystems Authors needs to make to build a sustainable competitive advantage.
