The Next Wave of Business Models in Asia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Next Wave of Business Models in Asia
This is an MIT Sloan Management Review Article. The global appetite for Korean entertainment - movies, TV shows, and music videos - has exploded in recent years. For non-Korean-speaking viewers, subtitles are crucial to the experience. Enter Viki Inc., a company that hosts content for streaming and provides subtitles and closed captions. Viki both eliminates language barriers and introduces the content to an otherwise unserved audience. Traditionally, subtitles are created by a bilingual translator hired by the producer or broadcaster. But the process is expensive and slow to scale. To overcome these challenges, Viki developed a business model leveraging a community of more than 150,000 volunteers. This model allows Viki to crowdsource subtitles for Asian content in numerous languages. Viki rewards volunteers with gamified badges, the ability to view videos not otherwise available in their region, early access to new shows, and an advertising-free, high-definition experience of the content. The combination of rapidly increasing internet video adoption rates and a greater appetite for foreign content - both in Asia and globally - has become a big opportunity for Viki, which was acquired by Tokyo-based Rakuten Inc. for a reported price of $200 million in 2013. The authors argue that Viki's story exemplifies a larger trend playing out in Asia. They see Viki as an archetype of a new generation of companies leveraging business model innovation to drive growth in Asia. But to understand this type of business model innovation in its proper context, it's important to understand Viki's forerunners. The authors describe two distinct, yet overlapping, waves of business innovation from emerging markets in Asia in recent years: one decades old and still going, and another that is newer and includes companies like Viki. The first wave primarily exploited differences in labor and other input costs between developed and developing markets. By contrast, the second wave is driven primarily by business model innovation and typically leverages new technology. These companies are characterized by extensive and often radical reconfigurations of the profit formula, resources, processes, and relationships within a broader stakeholder ecosystem. They may have a global orientation from the start.
Authors :: Asher Devang, Christian Kruse, Andy Parker, Pontus M.A. Siren
Swot Analysis of "The Next Wave of Business Models in Asia" written by Asher Devang, Christian Kruse, Andy Parker, Pontus M.A. Siren includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Viki Subtitles facing as an external strategic factors. Some of the topics covered in The Next Wave of Business Models in Asia case study are - Strategic Management Strategies, Entrepreneurship and Global Business.
Some of the macro environment factors that can be used to understand the The Next Wave of Business Models in Asia casestudy better are - – supply chains are disrupted by pandemic , increasing transportation and logistics costs, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, wage bills are increasing,
increasing energy prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of The Next Wave of Business Models in Asia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Next Wave of Business Models in Asia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Viki Subtitles, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Viki Subtitles 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 The Next Wave of Business Models in Asia can be done for the following purposes –
1. Strategic planning using facts provided in The Next Wave of Business Models in Asia case study
2. Improving business portfolio management of Viki Subtitles
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 Viki Subtitles
Strengths The Next Wave of Business Models in Asia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Viki Subtitles in The Next Wave of Business Models in Asia Harvard Business Review case study are -
Organizational Resilience of Viki Subtitles
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Viki Subtitles does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Viki Subtitles 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 Viki Subtitles is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Next Wave of Business Models in Asia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Viki Subtitles has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Viki Subtitles 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.
Highly skilled collaborators
– Viki Subtitles 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 The Next Wave of Business Models in Asia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Viki Subtitles has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Next Wave of Business Models in Asia 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 Viki Subtitles in the sector have low bargaining power. The Next Wave of Business Models in Asia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Viki Subtitles to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Viki Subtitles has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Viki Subtitles to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Viki Subtitles in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Viki Subtitles is one of the leading recruiters in the industry. Managers in the The Next Wave of Business Models in Asia are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Viki Subtitles is present in almost all the verticals within the industry. This has provided firm in The Next Wave of Business Models in Asia 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.
High switching costs
– The high switching costs that Viki Subtitles 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.
Cross disciplinary teams
– Horizontal connected teams at the Viki Subtitles 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 The Next Wave of Business Models in Asia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Next Wave of Business Models in Asia are -
Skills based hiring
– The stress on hiring functional specialists at Viki Subtitles has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Low market penetration in new markets
– Outside its home market of Viki Subtitles, firm in the HBR case study The Next Wave of Business Models in Asia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Viki Subtitles 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 - The Next Wave of Business Models in Asia should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Asher Devang, Christian Kruse, Andy Parker, Pontus M.A. Siren suggests that, Viki Subtitles 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.
Increasing silos among functional specialists
– The organizational structure of Viki Subtitles is dominated by functional specialists. It is not different from other players in the Global Business segment. Viki Subtitles needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Viki Subtitles to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Viki Subtitles has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Viki Subtitles 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.
Aligning sales with marketing
– It come across in the case study The Next Wave of Business Models in Asia 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 The Next Wave of Business Models in Asia can leverage the sales team experience to cultivate customer relationships as Viki Subtitles 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, Viki Subtitles is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Next Wave of Business Models in Asia can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Next Wave of Business Models in Asia, is just above the industry average. Viki Subtitles 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Next Wave of Business Models in Asia, it seems that the employees of Viki Subtitles don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities The Next Wave of Business Models in Asia | 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 The Next Wave of Business Models in Asia are -
Buying journey improvements
– Viki Subtitles can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Next Wave of Business Models in Asia 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 Viki Subtitles can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Viki Subtitles 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.
Leveraging digital technologies
– Viki Subtitles 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.
Better consumer reach
– The expansion of the 5G network will help Viki Subtitles to increase its market reach. Viki Subtitles 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Viki Subtitles 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.
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. Viki Subtitles can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Viki Subtitles in the consumer business. Now Viki Subtitles can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Viki Subtitles 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.
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 Viki Subtitles 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Viki Subtitles 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, The Next Wave of Business Models in Asia, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Viki Subtitles has opened avenues for new revenue streams for the organization in the industry. This can help Viki Subtitles to build a more holistic ecosystem as suggested in the The Next Wave of Business Models in Asia case study. Viki Subtitles can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Viki Subtitles 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 The Next Wave of Business Models in Asia - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Viki Subtitles to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats The Next Wave of Business Models in Asia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Next Wave of Business Models in Asia are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Viki Subtitles 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 The Next Wave of Business Models in Asia .
Consumer confidence and its impact on Viki Subtitles 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.
Increasing wage structure of Viki Subtitles
– 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 Viki Subtitles.
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 Viki Subtitles in the Global Business sector and impact the bottomline of the organization.
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.
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 Viki Subtitles.
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 Viki Subtitles business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Viki Subtitles 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Viki Subtitles with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Viki Subtitles 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Next Wave of Business Models in Asia, Viki Subtitles may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Shortening product life cycle
– it is one of the major threat that Viki Subtitles is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of The Next Wave of Business Models in Asia 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 The Next Wave of Business Models in Asia 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 The Next Wave of Business Models in Asia 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 The Next Wave of Business Models in Asia 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 The Next Wave of Business Models in Asia 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 Viki Subtitles needs to make to build a sustainable competitive advantage.