TixToGo: Financing a Silicon Valley Start-Up SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of TixToGo: Financing a Silicon Valley Start-Up
Describes TixToGo, a Silicon Valley start-up company that offers online solutions to individuals and organizations that want to offer activities and/or collect registration fees for events over the Internet. A serial entrepreneur and his partner started the company in San Francisco in 1997. While the business model seems quite attractive, TixToGo has had difficulty gaining momentum. The founders have therefore decided to hire Lu Cordova, a manager and entrepreneur with considerable start-up experience as CEO. Her first day on the job is May 18, 1999. TixToGo is also her first job as CEO of a company she did not start. The company has $12,000 in the bank. The monthly burn rate is $30,000. Lu needs to act quickly.
Swot Analysis of "TixToGo: Financing a Silicon Valley Start-Up" written by Walter Kuemmerle, William J. Coughlin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tixtogo Lu facing as an external strategic factors. Some of the topics covered in TixToGo: Financing a Silicon Valley Start-Up case study are - Strategic Management Strategies, Financial management, IT, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the TixToGo: Financing a Silicon Valley Start-Up casestudy better are - – increasing household debt because of falling income levels, increasing energy prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
geopolitical disruptions, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of TixToGo: Financing a Silicon Valley Start-Up
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TixToGo: Financing a Silicon Valley Start-Up case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tixtogo Lu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tixtogo Lu 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 TixToGo: Financing a Silicon Valley Start-Up can be done for the following purposes –
1. Strategic planning using facts provided in TixToGo: Financing a Silicon Valley Start-Up case study
2. Improving business portfolio management of Tixtogo Lu
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 Tixtogo Lu
Strengths TixToGo: Financing a Silicon Valley Start-Up | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tixtogo Lu in TixToGo: Financing a Silicon Valley Start-Up Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Tixtogo Lu in the sector have low bargaining power. TixToGo: Financing a Silicon Valley Start-Up has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tixtogo Lu to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Tixtogo Lu has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tixtogo Lu 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.
Analytics focus
– Tixtogo Lu 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 Walter Kuemmerle, William J. Coughlin 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.
Learning organization
- Tixtogo Lu 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 Tixtogo Lu is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TixToGo: Financing a Silicon Valley Start-Up Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Tixtogo Lu digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tixtogo Lu 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 switching costs
– The high switching costs that Tixtogo Lu 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 TixToGo: Financing a Silicon Valley Start-Up 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.
Training and development
– Tixtogo Lu has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in TixToGo: Financing a Silicon Valley Start-Up 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.
Highly skilled collaborators
– Tixtogo Lu 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 TixToGo: Financing a Silicon Valley Start-Up HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Tixtogo Lu 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.
Ability to recruit top talent
– Tixtogo Lu is one of the leading recruiters in the industry. Managers in the TixToGo: Financing a Silicon Valley Start-Up are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– TixToGo: Financing a Silicon Valley Start-Up firm has clearly differentiated products in the market place. This has enabled Tixtogo Lu to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Tixtogo Lu to invest into research and development (R&D) and innovation.
Weaknesses TixToGo: Financing a Silicon Valley Start-Up | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TixToGo: Financing a Silicon Valley Start-Up are -
Lack of clear differentiation of Tixtogo Lu products
– To increase the profitability and margins on the products, Tixtogo Lu needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Tixtogo Lu supply chain. Even after few cautionary changes mentioned in the HBR case study - TixToGo: Financing a Silicon Valley Start-Up, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tixtogo Lu vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Tixtogo Lu 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.
Low market penetration in new markets
– Outside its home market of Tixtogo Lu, firm in the HBR case study TixToGo: Financing a Silicon Valley Start-Up needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As TixToGo: Financing a Silicon Valley Start-Up HBR case study mentions - Tixtogo Lu 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study TixToGo: Financing a Silicon Valley Start-Up, is just above the industry average. Tixtogo Lu 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 TixToGo: Financing a Silicon Valley Start-Up, in the dynamic environment Tixtogo Lu has struggled to respond to the nimble upstart competition. Tixtogo Lu has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study TixToGo: Financing a Silicon Valley Start-Up that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case TixToGo: Financing a Silicon Valley Start-Up can leverage the sales team experience to cultivate customer relationships as Tixtogo Lu is planning to shift buying processes online.
Interest costs
– Compare to the competition, Tixtogo Lu 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study TixToGo: Financing a Silicon Valley Start-Up, it seems that the employees of Tixtogo Lu 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the TixToGo: Financing a Silicon Valley Start-Up 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 Tixtogo Lu has relatively successful track record of launching new products.
Opportunities TixToGo: Financing a Silicon Valley Start-Up | 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 TixToGo: Financing a Silicon Valley Start-Up are -
Developing new processes and practices
– Tixtogo Lu 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.
Buying journey improvements
– Tixtogo Lu can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TixToGo: Financing a Silicon Valley Start-Up 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.
Building a culture of innovation
– managers at Tixtogo Lu 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.
Loyalty marketing
– Tixtogo Lu 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tixtogo Lu is facing challenges because of the dominance of functional experts in the organization. TixToGo: Financing a Silicon Valley Start-Up case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tixtogo Lu 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tixtogo Lu can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Tixtogo Lu 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. Tixtogo Lu 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.
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. Tixtogo Lu can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Tixtogo Lu 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tixtogo Lu 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 Tixtogo Lu to hire the very best people irrespective of their geographical location.
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. Tixtogo Lu can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tixtogo Lu 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.
Threats TixToGo: Financing a Silicon Valley Start-Up External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TixToGo: Financing a Silicon Valley Start-Up are -
Stagnating economy with rate increase
– Tixtogo Lu 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.
Technology acceleration in Forth Industrial Revolution
– Tixtogo Lu has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Tixtogo Lu 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.
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. Tixtogo Lu can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TixToGo: Financing a Silicon Valley Start-Up, Tixtogo Lu 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 .
Shortening product life cycle
– it is one of the major threat that Tixtogo Lu is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Tixtogo Lu 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tixtogo Lu 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.
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 Tixtogo Lu in the Innovation & Entrepreneurship sector and impact the bottomline 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.
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 Tixtogo Lu.
High dependence on third party suppliers
– Tixtogo Lu 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tixtogo Lu with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tixtogo Lu 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 TixToGo: Financing a Silicon Valley Start-Up .
Weighted SWOT Analysis of TixToGo: Financing a Silicon Valley Start-Up 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 TixToGo: Financing a Silicon Valley Start-Up 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 TixToGo: Financing a Silicon Valley Start-Up 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 TixToGo: Financing a Silicon Valley Start-Up 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 TixToGo: Financing a Silicon Valley Start-Up 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 Tixtogo Lu needs to make to build a sustainable competitive advantage.
