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 - – challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, wage bills are increasing, geopolitical disruptions, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
Ability to lead change in Innovation & Entrepreneurship field
– Splunk Enterprise 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 Splunk Enterprise in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Splunk Enterprise in the sector have low bargaining power. Splunk and Venture Capital Investing in Enterprise Technology (Part A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Splunk Enterprise to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
Innovation driven organization
– Splunk Enterprise is one of the most innovative firm in sector. Manager in Splunk and Venture Capital Investing in Enterprise Technology (Part A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Splunk and Venture Capital Investing in Enterprise Technology (Part A) firm has clearly differentiated products in the market place. This has enabled Splunk Enterprise to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Splunk Enterprise to invest into research and development (R&D) 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 -
Products dominated business model
– Even though Splunk Enterprise 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 - Splunk and Venture Capital Investing in Enterprise Technology (Part A) should strive to include more intangible value offerings along with its core products and services.
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 bargaining power of channel partners
– Because of the regulatory requirements, Tim Hsia, John Glynn suggests that, Splunk Enterprise 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.
High cash cycle compare to competitors
Splunk Enterprise 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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Splunk Enterprise needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– After analyzing the HBR case study Splunk and Venture Capital Investing in Enterprise Technology (Part A), it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
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.
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.
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.
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 -
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.
Better consumer reach
– The expansion of the 5G network will help Splunk Enterprise to increase its market reach. Splunk Enterprise 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.
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.
Leveraging digital technologies
– Splunk Enterprise 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Splunk Enterprise 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Splunk Enterprise 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, Splunk and Venture Capital Investing in Enterprise Technology (Part A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Splunk Enterprise 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.
Using analytics as competitive advantage
– Splunk Enterprise 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 Splunk and Venture Capital Investing in Enterprise Technology (Part A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Splunk Enterprise to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
Increasing wage structure of Splunk Enterprise
– 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 Splunk Enterprise.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Splunk Enterprise 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.
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.
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.
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 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.