Case Study Description of Dropbox: 'It Just Works'
Dropbox is a venture-backed Silicon Valley startup, founded in 2006, that provides online storage and backup services to millions of customers using a "freemium" (free + premium offers) business model. The case recounts Dropbox's history from conception through mid-2010, when founder/CEO Drew Houston must make strategic decisions about new product features, how to target enterprise customers, and whether to pursue distribution deals with smartphone manufacturers.
Authors :: Thomas R. Eisenmann, Michael Pao, Lauren Barley
Swot Analysis of "Dropbox: 'It Just Works'" written by Thomas R. Eisenmann, Michael Pao, Lauren Barley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dropbox Dropbox's facing as an external strategic factors. Some of the topics covered in Dropbox: 'It Just Works' case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Internet, Marketing, Product development and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Dropbox: 'It Just Works' casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing transportation and logistics costs, supply chains are disrupted by pandemic , there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation,
cloud computing is disrupting traditional business models, increasing commodity prices, etc
Introduction to SWOT Analysis of Dropbox: 'It Just Works'
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dropbox: 'It Just Works' case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dropbox Dropbox's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dropbox Dropbox'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 Dropbox: 'It Just Works' can be done for the following purposes –
1. Strategic planning using facts provided in Dropbox: 'It Just Works' case study
2. Improving business portfolio management of Dropbox Dropbox'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 Dropbox Dropbox's
Strengths Dropbox: 'It Just Works' | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dropbox Dropbox's in Dropbox: 'It Just Works' Harvard Business Review case study are -
Highly skilled collaborators
– Dropbox Dropbox'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 Dropbox: 'It Just Works' HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Dropbox: 'It Just Works' 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.
High brand equity
– Dropbox Dropbox's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dropbox Dropbox's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Dropbox Dropbox's is one of the most innovative firm in sector. Manager in Dropbox: 'It Just Works' Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Dropbox Dropbox'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 Dropbox Dropbox's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dropbox: 'It Just Works' Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Dropbox: 'It Just Works' firm has clearly differentiated products in the market place. This has enabled Dropbox Dropbox's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Dropbox Dropbox's to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Dropbox Dropbox's in the sector have low bargaining power. Dropbox: 'It Just Works' has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dropbox Dropbox's to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Innovation & Entrepreneurship field
– Dropbox Dropbox's 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 Dropbox Dropbox's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Dropbox Dropbox's 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.
Analytics focus
– Dropbox Dropbox's 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 Thomas R. Eisenmann, Michael Pao, Lauren Barley 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Dropbox Dropbox's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dropbox Dropbox'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.
Effective Research and Development (R&D)
– Dropbox Dropbox'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 Dropbox: 'It Just Works' - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Dropbox: 'It Just Works' | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dropbox: 'It Just Works' are -
Aligning sales with marketing
– It come across in the case study Dropbox: 'It Just Works' 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 Dropbox: 'It Just Works' can leverage the sales team experience to cultivate customer relationships as Dropbox Dropbox's is planning to shift buying processes online.
Lack of clear differentiation of Dropbox Dropbox's products
– To increase the profitability and margins on the products, Dropbox Dropbox's needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Dropbox Dropbox's 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.
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 Dropbox Dropbox's supply chain. Even after few cautionary changes mentioned in the HBR case study - Dropbox: 'It Just Works', it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dropbox Dropbox's vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Dropbox Dropbox'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.
Skills based hiring
– The stress on hiring functional specialists at Dropbox Dropbox's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Dropbox Dropbox's is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Dropbox Dropbox's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dropbox Dropbox's to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Dropbox: 'It Just Works' 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 Dropbox Dropbox's 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Dropbox Dropbox's, firm in the HBR case study Dropbox: 'It Just Works' needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas R. Eisenmann, Michael Pao, Lauren Barley suggests that, Dropbox Dropbox'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.
High cash cycle compare to competitors
Dropbox Dropbox'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.
Opportunities Dropbox: 'It Just Works' | 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 Dropbox: 'It Just Works' are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dropbox Dropbox'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 Dropbox Dropbox's to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Dropbox Dropbox'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.
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. Dropbox Dropbox's 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. Dropbox Dropbox's 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.
Leveraging digital technologies
– Dropbox Dropbox'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.
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 Dropbox Dropbox's in the consumer business. Now Dropbox Dropbox's can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Dropbox Dropbox's to increase its market reach. Dropbox Dropbox's 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.
Developing new processes and practices
– Dropbox Dropbox's 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.
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. Dropbox Dropbox's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Dropbox Dropbox's has opened avenues for new revenue streams for the organization in the industry. This can help Dropbox Dropbox's to build a more holistic ecosystem as suggested in the Dropbox: 'It Just Works' case study. Dropbox Dropbox's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dropbox Dropbox's is facing challenges because of the dominance of functional experts in the organization. Dropbox: 'It Just Works' 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.
Buying journey improvements
– Dropbox Dropbox's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dropbox: 'It Just Works' 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 Dropbox Dropbox's 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.
Learning at scale
– Online learning technologies has now opened space for Dropbox Dropbox'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.
Threats Dropbox: 'It Just Works' External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dropbox: 'It Just Works' are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dropbox Dropbox's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Dropbox: 'It Just Works', Dropbox Dropbox'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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dropbox Dropbox's 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.
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. Dropbox Dropbox's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Dropbox Dropbox's in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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 Dropbox Dropbox's.
Regulatory challenges
– Dropbox Dropbox'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.
Stagnating economy with rate increase
– Dropbox Dropbox'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.
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 Dropbox Dropbox's business can come under increasing regulations regarding data privacy, data security, etc.
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. Dropbox Dropbox's needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
Technology acceleration in Forth Industrial Revolution
– Dropbox Dropbox's has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Dropbox Dropbox's 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.
Environmental challenges
– Dropbox Dropbox'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. Dropbox Dropbox's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Weighted SWOT Analysis of Dropbox: 'It Just Works' 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 Dropbox: 'It Just Works' 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 Dropbox: 'It Just Works' 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 Dropbox: 'It Just Works' 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 Dropbox: 'It Just Works' 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 Dropbox Dropbox's needs to make to build a sustainable competitive advantage.