Case Study Description of ServerVault: "Reliable, Secure, and Wicked Fast"
This is a Darden case study.In July 2000, two founders of this new Web-hosting company are contemplating raising $5 million to $15 million in a second-round financing from venture capitalists. The task for the student is to forecast the firm's cash receipts and disbursements in an effort to determine the firm's "burn rate," i.e., the rate of cash consumption and how long the financing will sustain the firm. The new economy setting of this case permits the instructor to extend well-known financial skills and concepts to an industry that attracts high student-interest. This case is ideally used in an introductory finance course as an early exercise in forecasting, modeling, sensitivity analysis, and interpretation. It can be a useful foundation for later classes in cash-flow estimation and valuation. This case presumes that the students have already been exposed to the structure and interpretation of the statement of cash flows (SOCF), and the relationship of the SOCF to the income statement and balance sheet. The case also may offer opportunities for interdisciplinary teaching with instructors in marketing and entrepreneurship.
Swot Analysis of "ServerVault: "Reliable, Secure, and Wicked Fast"" written by Robert F. Bruner, Chad Rynbrandt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Socf Cash facing as an external strategic factors. Some of the topics covered in ServerVault: "Reliable, Secure, and Wicked Fast" case study are - Strategic Management Strategies, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the ServerVault: "Reliable, Secure, and Wicked Fast" casestudy better are - – increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, geopolitical disruptions, there is increasing trade war between United States & China, there is backlash against globalization,
supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of ServerVault: "Reliable, Secure, and Wicked Fast"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ServerVault: "Reliable, Secure, and Wicked Fast" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Socf Cash, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Socf Cash 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 ServerVault: "Reliable, Secure, and Wicked Fast" can be done for the following purposes –
1. Strategic planning using facts provided in ServerVault: "Reliable, Secure, and Wicked Fast" case study
2. Improving business portfolio management of Socf Cash
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Socf Cash
Strengths ServerVault: "Reliable, Secure, and Wicked Fast" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Socf Cash in ServerVault: "Reliable, Secure, and Wicked Fast" Harvard Business Review case study are -
Organizational Resilience of Socf Cash
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Socf Cash does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Socf Cash is one of the leading recruiters in the industry. Managers in the ServerVault: "Reliable, Secure, and Wicked Fast" are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Socf Cash 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 Socf Cash is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ServerVault: "Reliable, Secure, and Wicked Fast" Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Socf Cash is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Socf Cash is present in almost all the verticals within the industry. This has provided firm in ServerVault: "Reliable, Secure, and Wicked Fast" 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.
High switching costs
– The high switching costs that Socf Cash 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 ServerVault: "Reliable, Secure, and Wicked Fast" 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.
Low bargaining power of suppliers
– Suppliers of Socf Cash in the sector have low bargaining power. ServerVault: "Reliable, Secure, and Wicked Fast" has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Socf Cash to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– ServerVault: "Reliable, Secure, and Wicked Fast" firm has clearly differentiated products in the market place. This has enabled Socf Cash to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Socf Cash to invest into research and development (R&D) and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Socf Cash digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Socf Cash 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.
Ability to lead change in Finance & Accounting field
– Socf Cash 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 Socf Cash in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Socf Cash has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ServerVault: "Reliable, Secure, and Wicked Fast" 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.
Weaknesses ServerVault: "Reliable, Secure, and Wicked Fast" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ServerVault: "Reliable, Secure, and Wicked Fast" are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the ServerVault: "Reliable, Secure, and Wicked Fast" 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 Socf Cash has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study ServerVault: "Reliable, Secure, and Wicked Fast" 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 Socf Cash 's lucrative customers.
Lack of clear differentiation of Socf Cash products
– To increase the profitability and margins on the products, Socf Cash needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert F. Bruner, Chad Rynbrandt suggests that, Socf Cash 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.
Aligning sales with marketing
– It come across in the case study ServerVault: "Reliable, Secure, and Wicked Fast" 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 ServerVault: "Reliable, Secure, and Wicked Fast" can leverage the sales team experience to cultivate customer relationships as Socf Cash is planning to shift buying processes online.
Products dominated business model
– Even though Socf Cash 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 - ServerVault: "Reliable, Secure, and Wicked Fast" should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Socf Cash has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Socf Cash even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
No frontier risks strategy
– After analyzing the HBR case study ServerVault: "Reliable, Secure, and Wicked Fast", it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ServerVault: "Reliable, Secure, and Wicked Fast", in the dynamic environment Socf Cash has struggled to respond to the nimble upstart competition. Socf Cash 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, Socf Cash 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ServerVault: "Reliable, Secure, and Wicked Fast", it seems that the employees of Socf Cash 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.
Opportunities ServerVault: "Reliable, Secure, and Wicked Fast" | 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 ServerVault: "Reliable, Secure, and Wicked Fast" are -
Using analytics as competitive advantage
– Socf Cash 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 ServerVault: "Reliable, Secure, and Wicked Fast" - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Socf Cash to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Socf Cash 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 Finance & Accounting segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Socf Cash 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. Socf Cash 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.
Developing new processes and practices
– Socf Cash can develop new processes and procedures in Finance & Accounting 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.
Creating value in data economy
– The success of analytics program of Socf Cash has opened avenues for new revenue streams for the organization in the industry. This can help Socf Cash to build a more holistic ecosystem as suggested in the ServerVault: "Reliable, Secure, and Wicked Fast" case study. Socf Cash can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Socf Cash can use these opportunities to build new business models that can help the communities that Socf Cash operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Socf Cash can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Socf Cash in the consumer business. Now Socf Cash can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Socf Cash 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.
Leveraging digital technologies
– Socf Cash 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.
Buying journey improvements
– Socf Cash can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ServerVault: "Reliable, Secure, and Wicked Fast" 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.
Learning at scale
– Online learning technologies has now opened space for Socf Cash 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Socf Cash in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Threats ServerVault: "Reliable, Secure, and Wicked Fast" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ServerVault: "Reliable, Secure, and Wicked Fast" are -
Increasing wage structure of Socf Cash
– 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 Socf Cash.
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 Socf Cash in the Finance & Accounting 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.
Stagnating economy with rate increase
– Socf Cash 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Socf Cash 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 ServerVault: "Reliable, Secure, and Wicked Fast" .
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ServerVault: "Reliable, Secure, and Wicked Fast", Socf Cash may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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. Socf Cash 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.
Environmental challenges
– Socf Cash 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. Socf Cash can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Regulatory challenges
– Socf Cash 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 Finance & Accounting industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Socf Cash in the Finance & Accounting industry. The Finance & Accounting 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 Socf Cash.
Consumer confidence and its impact on Socf Cash 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.
Weighted SWOT Analysis of ServerVault: "Reliable, Secure, and Wicked Fast" 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 ServerVault: "Reliable, Secure, and Wicked Fast" 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 ServerVault: "Reliable, Secure, and Wicked Fast" 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 ServerVault: "Reliable, Secure, and Wicked Fast" 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 ServerVault: "Reliable, Secure, and Wicked Fast" 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 Socf Cash needs to make to build a sustainable competitive advantage.
