VendQuest (A): The Business Idea SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of VendQuest (A): The Business Idea
A potential founder of a company is considering whether to start up a new enterprise that would link parts distributors with customers in the construction industries via the Internet. This case describes the industry and the potential advantages to distributors and customers.
Swot Analysis of "VendQuest (A): The Business Idea" written by Dwight B. Crane, David C. Foster includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Distributors Vendquest facing as an external strategic factors. Some of the topics covered in VendQuest (A): The Business Idea case study are - Strategic Management Strategies, Entrepreneurship, Internet, Marketing and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the VendQuest (A): The Business Idea casestudy better are - – central banks are concerned over increasing inflation, wage bills are increasing, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, challanges to central banks by blockchain based private currencies,
technology disruption, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of VendQuest (A): The Business Idea
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in VendQuest (A): The Business Idea case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Distributors Vendquest, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Distributors Vendquest 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 VendQuest (A): The Business Idea can be done for the following purposes –
1. Strategic planning using facts provided in VendQuest (A): The Business Idea case study
2. Improving business portfolio management of Distributors Vendquest
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Distributors Vendquest
Strengths VendQuest (A): The Business Idea | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Distributors Vendquest in VendQuest (A): The Business Idea Harvard Business Review case study are -
Diverse revenue streams
– Distributors Vendquest is present in almost all the verticals within the industry. This has provided firm in VendQuest (A): The Business Idea 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 Innovation & Entrepreneurship industry
– VendQuest (A): The Business Idea firm has clearly differentiated products in the market place. This has enabled Distributors Vendquest to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Distributors Vendquest to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Distributors Vendquest in the sector have low bargaining power. VendQuest (A): The Business Idea has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Distributors Vendquest to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Distributors Vendquest in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Distributors Vendquest 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 Dwight B. Crane, David C. Foster 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.
Ability to lead change in Innovation & Entrepreneurship field
– Distributors Vendquest 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 Distributors Vendquest in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Distributors Vendquest
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Distributors Vendquest does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Distributors Vendquest has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in VendQuest (A): The Business Idea 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.
Cross disciplinary teams
– Horizontal connected teams at the Distributors Vendquest 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.
High switching costs
– The high switching costs that Distributors Vendquest 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.
Highly skilled collaborators
– Distributors Vendquest 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 VendQuest (A): The Business Idea HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the VendQuest (A): The Business Idea Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses VendQuest (A): The Business Idea | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of VendQuest (A): The Business Idea are -
Slow decision making process
– As mentioned earlier in the report, Distributors Vendquest 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. Distributors Vendquest 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, Dwight B. Crane, David C. Foster suggests that, Distributors Vendquest 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.
Skills based hiring
– The stress on hiring functional specialists at Distributors Vendquest 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.
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 Distributors Vendquest supply chain. Even after few cautionary changes mentioned in the HBR case study - VendQuest (A): The Business Idea, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Distributors Vendquest vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study VendQuest (A): The Business Idea, it seems that the employees of Distributors Vendquest 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study VendQuest (A): The Business Idea, in the dynamic environment Distributors Vendquest has struggled to respond to the nimble upstart competition. Distributors Vendquest has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Distributors Vendquest is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Distributors Vendquest needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Distributors Vendquest to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the VendQuest (A): The Business Idea 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 Distributors Vendquest has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Distributors Vendquest has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As VendQuest (A): The Business Idea HBR case study mentions - Distributors Vendquest 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.
Lack of clear differentiation of Distributors Vendquest products
– To increase the profitability and margins on the products, Distributors Vendquest needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities VendQuest (A): The Business Idea | 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 VendQuest (A): The Business Idea are -
Leveraging digital technologies
– Distributors Vendquest 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Distributors Vendquest is facing challenges because of the dominance of functional experts in the organization. VendQuest (A): The Business Idea 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.
Manufacturing automation
– Distributors Vendquest can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Distributors Vendquest 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. Distributors Vendquest 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Distributors Vendquest 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 Distributors Vendquest to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Distributors Vendquest 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.
Buying journey improvements
– Distributors Vendquest can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. VendQuest (A): The Business Idea 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.
Loyalty marketing
– Distributors Vendquest 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Distributors Vendquest can use these opportunities to build new business models that can help the communities that Distributors Vendquest operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 Distributors Vendquest in the consumer business. Now Distributors Vendquest 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, Distributors Vendquest 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.
Developing new processes and practices
– Distributors Vendquest can develop new processes and procedures in Innovation & Entrepreneurship 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.
Using analytics as competitive advantage
– Distributors Vendquest 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 VendQuest (A): The Business Idea - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Distributors Vendquest to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats VendQuest (A): The Business Idea External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study VendQuest (A): The Business Idea are -
Shortening product life cycle
– it is one of the major threat that Distributors Vendquest is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Distributors Vendquest 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. Distributors Vendquest can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
High dependence on third party suppliers
– Distributors Vendquest 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Distributors Vendquest in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Distributors Vendquest can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Distributors Vendquest business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Distributors Vendquest 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.
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. Distributors Vendquest 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.
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 Distributors Vendquest.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Distributors Vendquest 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 VendQuest (A): The Business Idea .
Increasing wage structure of Distributors Vendquest
– 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 Distributors Vendquest.
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.
Weighted SWOT Analysis of VendQuest (A): The Business Idea 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 VendQuest (A): The Business Idea 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 VendQuest (A): The Business Idea 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 VendQuest (A): The Business Idea 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 VendQuest (A): The Business Idea 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 Distributors Vendquest needs to make to build a sustainable competitive advantage.