Recounts the story of how Katrina Garnett single-handedly launched CrossWorlds, a successful enterprise application company. Focuses on two issues Garnett must wrestle with as she tries to manage her board of directors. The CrossWorlds board cautiously and slowly pursued the idea of an initial public offering, wanting to achieve more revenue traction before accessing the public markets. Unfortunately, the company was at a disadvantage because it recognized revenue using conservative guidelines: Instead of recognizing revenue when payment was received, CrossWorlds recognized revenue when the product "went live" at a customer site. Garnett's competitors used more aggressive methods, claiming higher revenues, and therefore, entering the public markets earlier. Also, Garnett felt that having a prominent investment banker on her board was limiting her options. Many investment banks refused even to meet with CrossWorlds because they simply assumed that the business would go to the board member's firm. Garnett was also frustrated with this board member's inability to transcend a banker's mind-set.
Swot Analysis of "Katrina Garnett" written by Garth Saloner, Emily Melton includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Garnett Crossworlds facing as an external strategic factors. Some of the topics covered in Katrina Garnett case study are - Strategic Management Strategies, IPO, Leadership and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Katrina Garnett casestudy better are - – supply chains are disrupted by pandemic , geopolitical disruptions, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing commodity prices, central banks are concerned over increasing inflation,
increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Katrina Garnett case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Garnett Crossworlds, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Garnett Crossworlds 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 Katrina Garnett can be done for the following purposes –
1. Strategic planning using facts provided in Katrina Garnett case study
2. Improving business portfolio management of Garnett Crossworlds
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 Garnett Crossworlds
Strengths Katrina Garnett | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Garnett Crossworlds in Katrina Garnett Harvard Business Review case study are -
Organizational Resilience of Garnett Crossworlds
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Garnett Crossworlds does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Katrina Garnett 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.
Ability to recruit top talent
– Garnett Crossworlds is one of the leading recruiters in the industry. Managers in the Katrina Garnett 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
– Katrina Garnett firm has clearly differentiated products in the market place. This has enabled Garnett Crossworlds to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Garnett Crossworlds to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Garnett Crossworlds in the sector have low bargaining power. Katrina Garnett has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Garnett Crossworlds to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Garnett Crossworlds 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 Katrina Garnett HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Garnett Crossworlds is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Garnett Crossworlds has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Garnett Crossworlds 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.
Cross disciplinary teams
– Horizontal connected teams at the Garnett Crossworlds 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Garnett Crossworlds digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Garnett Crossworlds 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 Garnett Crossworlds 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.
High brand equity
– Garnett Crossworlds has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Garnett Crossworlds to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Katrina Garnett | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Katrina Garnett are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Katrina Garnett, in the dynamic environment Garnett Crossworlds has struggled to respond to the nimble upstart competition. Garnett Crossworlds has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Katrina Garnett 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 Garnett Crossworlds has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Garnett Crossworlds 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. Garnett Crossworlds 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.
Aligning sales with marketing
– It come across in the case study Katrina Garnett 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 Katrina Garnett can leverage the sales team experience to cultivate customer relationships as Garnett Crossworlds is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Garnett Crossworlds is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Katrina Garnett can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Garnett Crossworlds, firm in the HBR case study Katrina Garnett needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Garnett Crossworlds 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Katrina Garnett, is just above the industry average. Garnett Crossworlds 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.
Slow to strategic competitive environment developments
– As Katrina Garnett HBR case study mentions - Garnett Crossworlds 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.
No frontier risks strategy
– After analyzing the HBR case study Katrina Garnett, 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Katrina Garnett 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 Garnett Crossworlds 's lucrative customers.
Opportunities Katrina Garnett | 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 Katrina Garnett are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Garnett Crossworlds can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Garnett Crossworlds can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Garnett Crossworlds 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 Garnett Crossworlds to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Garnett Crossworlds 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 Katrina Garnett - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Garnett Crossworlds to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Garnett Crossworlds 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Garnett Crossworlds can use these opportunities to build new business models that can help the communities that Garnett Crossworlds operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Learning at scale
– Online learning technologies has now opened space for Garnett Crossworlds 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.
Creating value in data economy
– The success of analytics program of Garnett Crossworlds has opened avenues for new revenue streams for the organization in the industry. This can help Garnett Crossworlds to build a more holistic ecosystem as suggested in the Katrina Garnett case study. Garnett Crossworlds can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Garnett Crossworlds 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Garnett Crossworlds is facing challenges because of the dominance of functional experts in the organization. Katrina Garnett 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, Garnett Crossworlds 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.
Building a culture of innovation
– managers at Garnett Crossworlds 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.
Better consumer reach
– The expansion of the 5G network will help Garnett Crossworlds to increase its market reach. Garnett Crossworlds 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.
Threats Katrina Garnett External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Katrina Garnett are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Garnett Crossworlds 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.
Environmental challenges
– Garnett Crossworlds 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. Garnett Crossworlds can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Consumer confidence and its impact on Garnett Crossworlds 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.
Shortening product life cycle
– it is one of the major threat that Garnett Crossworlds is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Garnett Crossworlds business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Garnett Crossworlds 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.
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 Garnett Crossworlds in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Garnett Crossworlds 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Garnett Crossworlds 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 Katrina Garnett .
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 Garnett Crossworlds.
Regulatory challenges
– Garnett Crossworlds 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.
Increasing wage structure of Garnett Crossworlds
– 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 Garnett Crossworlds.
Weighted SWOT Analysis of Katrina Garnett 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 Katrina Garnett 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 Katrina Garnett 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 Katrina Garnett 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 Katrina Garnett 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 Garnett Crossworlds needs to make to build a sustainable competitive advantage.