Vermeer Technologies (A): A Company Is Born SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Vermeer Technologies (A): A Company Is Born
Charles Ferguson has just heard from a venture capital (VC) consortium that it is willing to finance Vermeer Technologies, a company he has cofounded for developing Internet software. The funds are sorely needed, but the VCs have imposed some onerous conditions, including a request that Vermeer's first CEO be an outsider.
Swot Analysis of "Vermeer Technologies (A): A Company Is Born" written by Ashish Nanda, Takia Mahmood includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vermeer Vermeer's facing as an external strategic factors. Some of the topics covered in Vermeer Technologies (A): A Company Is Born case study are - Strategic Management Strategies, Hiring, Mergers & acquisitions, Organizational structure, Product development, Technology, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Vermeer Technologies (A): A Company Is Born casestudy better are - – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, 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, technology disruption, etc
Introduction to SWOT Analysis of Vermeer Technologies (A): A Company Is Born
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Vermeer Technologies (A): A Company Is Born case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vermeer Vermeer's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vermeer Vermeer's 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 Vermeer Technologies (A): A Company Is Born can be done for the following purposes –
1. Strategic planning using facts provided in Vermeer Technologies (A): A Company Is Born case study
2. Improving business portfolio management of Vermeer Vermeer's
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 Vermeer Vermeer's
Strengths Vermeer Technologies (A): A Company Is Born | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vermeer Vermeer's in Vermeer Technologies (A): A Company Is Born Harvard Business Review case study are -
Successful track record of launching new products
– Vermeer Vermeer's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vermeer Vermeer's 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.
Training and development
– Vermeer Vermeer's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Vermeer Technologies (A): A Company Is Born 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.
Effective Research and Development (R&D)
– Vermeer Vermeer's 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 Vermeer Technologies (A): A Company Is Born - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Vermeer Vermeer's is present in almost all the verticals within the industry. This has provided firm in Vermeer Technologies (A): A Company Is Born 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.
Cross disciplinary teams
– Horizontal connected teams at the Vermeer Vermeer's 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Vermeer Technologies (A): A Company Is Born firm has clearly differentiated products in the market place. This has enabled Vermeer Vermeer's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Vermeer Vermeer's to invest into research and development (R&D) and innovation.
Learning organization
- Vermeer Vermeer's 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 Vermeer Vermeer's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Vermeer Technologies (A): A Company Is Born Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Vermeer Vermeer's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Vermeer Vermeer's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vermeer Vermeer's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Vermeer Vermeer's 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 Vermeer Technologies (A): A Company Is Born HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Vermeer Vermeer's is one of the most innovative firm in sector. Manager in Vermeer Technologies (A): A Company Is Born Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Vermeer Vermeer's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vermeer Vermeer's 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.
Weaknesses Vermeer Technologies (A): A Company Is Born | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vermeer Technologies (A): A Company Is Born are -
Interest costs
– Compare to the competition, Vermeer Vermeer's 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.
Lack of clear differentiation of Vermeer Vermeer's products
– To increase the profitability and margins on the products, Vermeer Vermeer's needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Vermeer Technologies (A): A Company Is Born 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 Vermeer Vermeer's 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Vermeer Vermeer's 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.
Products dominated business model
– Even though Vermeer Vermeer's 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 - Vermeer Technologies (A): A Company Is Born should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Vermeer Vermeer's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Vermeer Vermeer's 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ashish Nanda, Takia Mahmood suggests that, Vermeer Vermeer's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Vermeer Technologies (A): A Company Is Born, is just above the industry average. Vermeer Vermeer's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Vermeer Technologies (A): A Company Is Born, in the dynamic environment Vermeer Vermeer's has struggled to respond to the nimble upstart competition. Vermeer Vermeer's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Vermeer Vermeer's supply chain. Even after few cautionary changes mentioned in the HBR case study - Vermeer Technologies (A): A Company Is Born, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vermeer Vermeer's vulnerable to further global disruptions in South East Asia.
Opportunities Vermeer Technologies (A): A Company Is Born | 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 Vermeer Technologies (A): A Company Is Born are -
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. Vermeer Vermeer's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vermeer Vermeer's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vermeer Vermeer's 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, Vermeer Vermeer's can use these opportunities to build new business models that can help the communities that Vermeer Vermeer's operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vermeer Vermeer's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vermeer Vermeer's 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 Vermeer Vermeer's to hire the very best people irrespective of their geographical location.
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 Vermeer Vermeer's in the consumer business. Now Vermeer Vermeer's can target international markets with far fewer capital restrictions requirements than the existing system.
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. Vermeer Vermeer's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vermeer Vermeer's is facing challenges because of the dominance of functional experts in the organization. Vermeer Technologies (A): A Company Is Born 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.
Leveraging digital technologies
– Vermeer Vermeer's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vermeer Vermeer's 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, Vermeer Technologies (A): A Company Is Born, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Vermeer Vermeer's 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.
Manufacturing automation
– Vermeer Vermeer's 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.
Threats Vermeer Technologies (A): A Company Is Born External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Vermeer Technologies (A): A Company Is Born are -
Stagnating economy with rate increase
– Vermeer Vermeer's 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.
Consumer confidence and its impact on Vermeer Vermeer's 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. Vermeer Vermeer's needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Vermeer Vermeer's business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Vermeer Vermeer's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Vermeer Technologies (A): A Company Is Born, Vermeer Vermeer's 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vermeer Vermeer's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Vermeer Vermeer's 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
– Vermeer Vermeer's 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. Vermeer Vermeer's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vermeer Vermeer's 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 Vermeer Technologies (A): A Company Is Born .
Increasing wage structure of Vermeer Vermeer's
– 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 Vermeer Vermeer's.
Weighted SWOT Analysis of Vermeer Technologies (A): A Company Is Born 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 Vermeer Technologies (A): A Company Is Born 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 Vermeer Technologies (A): A Company Is Born 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 Vermeer Technologies (A): A Company Is Born 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 Vermeer Technologies (A): A Company Is Born 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 Vermeer Vermeer's needs to make to build a sustainable competitive advantage.
