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 - – increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, talent flight as more people leaving formal jobs,
technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
Innovation driven organization
– Viki Subtitles is one of the most innovative firm in sector. Manager in The Next Wave of Business Models in Asia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Global Business industry
– The Next Wave of Business Models in Asia firm has clearly differentiated products in the market place. This has enabled Viki Subtitles to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Viki Subtitles to invest into research and development (R&D) and innovation.
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.
Effective Research and Development (R&D)
– Viki Subtitles 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 The Next Wave of Business Models in Asia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Viki Subtitles 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 Asher Devang, Christian Kruse, Andy Parker, Pontus M.A. Siren 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Next Wave of Business Models in Asia 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 Viki Subtitles has relatively successful track record of launching new products.
Lack of clear differentiation of Viki Subtitles products
– To increase the profitability and margins on the products, Viki Subtitles 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 Viki Subtitles supply chain. Even after few cautionary changes mentioned in the HBR case study - The Next Wave of Business Models in Asia, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Viki Subtitles vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study The Next Wave of Business Models in Asia, 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.
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 strategic competitive environment developments
– As The Next Wave of Business Models in Asia HBR case study mentions - Viki Subtitles takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
Capital Spending Reduction
– Even during the low interest decade, Viki Subtitles 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.
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 -
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.
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. Viki Subtitles can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Loyalty marketing
– Viki Subtitles 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 Viki Subtitles 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 Viki Subtitles to hire the very best people irrespective of their geographical location.
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.
Building a culture of innovation
– managers at Viki Subtitles 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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Viki Subtitles is facing challenges because of the dominance of functional experts in the organization. The Next Wave of Business Models in Asia 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.
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.
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.
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.
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 -
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.
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 .
Environmental challenges
– Viki Subtitles 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. Viki Subtitles can take advantage of this fund but it will also bring new competitors in the Global Business industry.
High dependence on third party suppliers
– Viki Subtitles 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.
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.
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.
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. Viki Subtitles 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.
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 .
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.
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.
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.
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.
