Splunk and Venture Capital Investing in Enterprise Technology (Part A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Splunk and Venture Capital Investing in Enterprise Technology (Part A)
Case describes the funding landscape for enterprise technology startups and how there has been a renewed interest in these types of companies in 2012 and 2013. The case highlights recent IPOs within this sector and the venture capitalists who have created funds to pursue an enterprise information technology investment thesis. Case focuses on the company Splunk to highlight the intricacies and nuances of building a successful enterprise startup from funding to IPO. The case also highlights issues around fund raising, selecting the right venture capitalists, and whether to accept an acquisition offer.
Swot Analysis of "Splunk and Venture Capital Investing in Enterprise Technology (Part A)" written by Tim Hsia, John Glynn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Splunk Enterprise facing as an external strategic factors. Some of the topics covered in Splunk and Venture Capital Investing in Enterprise Technology (Part A) case study are - Strategic Management Strategies, Social enterprise and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Splunk and Venture Capital Investing in Enterprise Technology (Part A) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing commodity prices, increasing energy prices, etc
Introduction to SWOT Analysis of Splunk and Venture Capital Investing in Enterprise Technology (Part A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Splunk and Venture Capital Investing in Enterprise Technology (Part A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Splunk Enterprise, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Splunk Enterprise 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 Splunk and Venture Capital Investing in Enterprise Technology (Part A) can be done for the following purposes –
1. Strategic planning using facts provided in Splunk and Venture Capital Investing in Enterprise Technology (Part A) case study
2. Improving business portfolio management of Splunk Enterprise
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 Splunk Enterprise
Strengths Splunk and Venture Capital Investing in Enterprise Technology (Part A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Splunk Enterprise in Splunk and Venture Capital Investing in Enterprise Technology (Part A) Harvard Business Review case study are -
Training and development
– Splunk Enterprise has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Splunk Enterprise digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Splunk Enterprise 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.
Analytics focus
– Splunk Enterprise 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 Tim Hsia, John Glynn can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Splunk Enterprise has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Splunk Enterprise to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Splunk Enterprise has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Splunk Enterprise 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
– Splunk Enterprise 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 Splunk and Venture Capital Investing in Enterprise Technology (Part A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Splunk Enterprise is one of the leading recruiters in the industry. Managers in the Splunk and Venture Capital Investing in Enterprise Technology (Part A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Splunk Enterprise in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Splunk Enterprise 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.
Operational resilience
– The operational resilience strategy in the Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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.
Organizational Resilience of Splunk Enterprise
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Splunk Enterprise does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Splunk Enterprise 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 Splunk Enterprise is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Splunk and Venture Capital Investing in Enterprise Technology (Part A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Splunk and Venture Capital Investing in Enterprise Technology (Part A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Splunk and Venture Capital Investing in Enterprise Technology (Part A) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Splunk and Venture Capital Investing in Enterprise Technology (Part A), is just above the industry average. Splunk Enterprise 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.
Skills based hiring
– The stress on hiring functional specialists at Splunk Enterprise 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.
Increasing silos among functional specialists
– The organizational structure of Splunk Enterprise is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Splunk Enterprise needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Splunk Enterprise to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Splunk and Venture Capital Investing in Enterprise Technology (Part A), in the dynamic environment Splunk Enterprise has struggled to respond to the nimble upstart competition. Splunk Enterprise has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Splunk Enterprise 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Splunk and Venture Capital Investing in Enterprise Technology (Part A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Splunk Enterprise 's lucrative customers.
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 Splunk Enterprise supply chain. Even after few cautionary changes mentioned in the HBR case study - Splunk and Venture Capital Investing in Enterprise Technology (Part A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Splunk Enterprise vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Splunk and Venture Capital Investing in Enterprise Technology (Part A), it seems that the employees of Splunk Enterprise 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.
Lack of clear differentiation of Splunk Enterprise products
– To increase the profitability and margins on the products, Splunk Enterprise needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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 Splunk Enterprise has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Splunk Enterprise has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Splunk and Venture Capital Investing in Enterprise Technology (Part A) | 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 Splunk and Venture Capital Investing in Enterprise Technology (Part A) are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Splunk Enterprise can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Splunk Enterprise can use these opportunities to build new business models that can help the communities that Splunk Enterprise operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Splunk Enterprise 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 Splunk Enterprise to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Splunk Enterprise has opened avenues for new revenue streams for the organization in the industry. This can help Splunk Enterprise to build a more holistic ecosystem as suggested in the Splunk and Venture Capital Investing in Enterprise Technology (Part A) case study. Splunk Enterprise can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Splunk Enterprise 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 Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Splunk Enterprise can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Splunk Enterprise is facing challenges because of the dominance of functional experts in the organization. Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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.
Building a culture of innovation
– managers at Splunk Enterprise 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 Innovation & Entrepreneurship segment.
Buying journey improvements
– Splunk Enterprise can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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
– Splunk Enterprise 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.
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. Splunk Enterprise 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. Splunk Enterprise can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Splunk Enterprise in the consumer business. Now Splunk Enterprise can target international markets with far fewer capital restrictions requirements than the existing system.
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 Splunk Enterprise 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.
Threats Splunk and Venture Capital Investing in Enterprise Technology (Part A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Splunk and Venture Capital Investing in Enterprise Technology (Part A) are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Splunk and Venture Capital Investing in Enterprise Technology (Part A), Splunk Enterprise may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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 Splunk Enterprise in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Regulatory challenges
– Splunk Enterprise 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 Innovation & Entrepreneurship 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.
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. Splunk Enterprise 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.
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 Splunk Enterprise business can come under increasing regulations regarding data privacy, data security, etc.
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. Splunk Enterprise can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Splunk Enterprise 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.
Environmental challenges
– Splunk Enterprise 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. Splunk Enterprise can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Technology acceleration in Forth Industrial Revolution
– Splunk Enterprise has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Splunk Enterprise needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Consumer confidence and its impact on Splunk Enterprise 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Splunk Enterprise needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Splunk Enterprise.
Weighted SWOT Analysis of Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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 Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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 Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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 Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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 Splunk and Venture Capital Investing in Enterprise Technology (Part A) 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 Splunk Enterprise needs to make to build a sustainable competitive advantage.