Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles"
It was long believed that entrepreneurship in Russia is close to impossible without government or mafia connections. This case study argues that, on the contrary, garage-type entrepreneurship is possible in Russia. For the Russians at Frontstep, the company in this case study, however, there were no how-to manuals to turn to. When the employees started making demands for Western-level salaries and benefits, matters came to a head. The problem was solved as the founders developed a hybrid organization, with Western incentives and structures, and Russian corporate culture.
Authors :: Manfred F.R. Kets de Vries, Konstantin Korotov, Elizabeth Florent-Treacy
Swot Analysis of "Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles"" written by Manfred F.R. Kets de Vries, Konstantin Korotov, Elizabeth Florent-Treacy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Frontstep Russia facing as an external strategic factors. Some of the topics covered in Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" case study are - Strategic Management Strategies, Entrepreneurship, Human resource management, Leadership, Organizational structure and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" casestudy better are - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, technology disruption, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies,
increasing energy prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Frontstep Russia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Frontstep Russia 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" can be done for the following purposes –
1. Strategic planning using facts provided in Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" case study
2. Improving business portfolio management of Frontstep Russia
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 Frontstep Russia
Strengths Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Frontstep Russia in Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" Harvard Business Review case study are -
Highly skilled collaborators
– Frontstep Russia 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Frontstep Russia 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.
Cross disciplinary teams
– Horizontal connected teams at the Frontstep Russia 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.
Learning organization
- Frontstep Russia 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 Frontstep Russia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Frontstep Russia in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Frontstep Russia
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Frontstep Russia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Frontstep Russia in the sector have low bargaining power. Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Frontstep Russia to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Frontstep Russia is present in almost all the verticals within the industry. This has provided firm in Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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.
Innovation driven organization
– Frontstep Russia is one of the most innovative firm in sector. Manager in Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Frontstep Russia is one of the leading recruiters in the industry. Managers in the Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Frontstep Russia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Frontstep Russia 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.
Effective Research and Development (R&D)
– Frontstep Russia 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" - 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" are -
Slow to strategic competitive environment developments
– As Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" HBR case study mentions - Frontstep Russia 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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 Frontstep Russia has relatively successful track record of launching new products.
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 Frontstep Russia supply chain. Even after few cautionary changes mentioned in the HBR case study - Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles", it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Frontstep Russia vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Frontstep Russia 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 operating costs
– Compare to the competitors, firm in the HBR case study Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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 Frontstep Russia 's lucrative customers.
Lack of clear differentiation of Frontstep Russia products
– To increase the profitability and margins on the products, Frontstep Russia needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Frontstep Russia, firm in the HBR case study Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" can leverage the sales team experience to cultivate customer relationships as Frontstep Russia is planning to shift buying processes online.
Interest costs
– Compare to the competition, Frontstep Russia 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.
No frontier risks strategy
– After analyzing the HBR case study Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles", it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Frontstep Russia 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 - Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" should strive to include more intangible value offerings along with its core products and services.
Opportunities Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" | 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Frontstep Russia to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Frontstep Russia 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.
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. Frontstep Russia 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 Frontstep Russia 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.
Developing new processes and practices
– Frontstep Russia 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.
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. Frontstep Russia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Frontstep Russia 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, Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles", to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Frontstep Russia 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. Frontstep Russia 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Frontstep Russia can use these opportunities to build new business models that can help the communities that Frontstep Russia operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Frontstep Russia 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 Frontstep Russia to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Frontstep Russia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Frontstep Russia is facing challenges because of the dominance of functional experts in the organization. Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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.
Manufacturing automation
– Frontstep Russia 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" are -
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. Frontstep Russia 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 Frontstep Russia in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Environmental challenges
– Frontstep Russia 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. Frontstep Russia can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Technology acceleration in Forth Industrial Revolution
– Frontstep Russia has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Frontstep Russia 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Frontstep Russia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Frontstep Russia 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. Frontstep Russia needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Frontstep Russia 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.
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. Frontstep Russia 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.
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 Frontstep Russia.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Frontstep Russia 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" .
Weighted SWOT Analysis of Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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 Frontstep in Russia (A): High-Tech Start-up and Survival in a New "Time of Troubles" 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 Frontstep Russia needs to make to build a sustainable competitive advantage.
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