Case Study Description of Demandforce: Pursuing Entrepreneurial Dreams
This case lends itself to courses covering the topic of rapid expansion of an enterprise. By 2012, Rick Berry, the founder and CEO of Demandforce (DF), and his team had built a company with annual revenue of approximately $70 million. DF provided small businesses with software tools used by more than 23,000 individual businesses and 50,000 business users to communicate with their customers. DF's business model was software as a service (SaaS) for a monthly fee. The company's value creation for its clients was evidenced by a high client renewal rate of 88%. But after DF was acquired by Intuit in April 2012, Berry knew that the game had changed dramatically. He was now confronted with a new challenge-one he had never faced: building a big company. He had to take his business and grow it into one with $750 million of revenue as quickly as possible.
Swot Analysis of "Demandforce: Pursuing Entrepreneurial Dreams" written by James R. Freeland, Edward D. Hess includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Df Demandforce facing as an external strategic factors. Some of the topics covered in Demandforce: Pursuing Entrepreneurial Dreams case study are - Strategic Management Strategies, Growth strategy, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Demandforce: Pursuing Entrepreneurial Dreams casestudy better are - – increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
competitive advantages are harder to sustain because of technology dispersion, technology disruption, etc
Introduction to SWOT Analysis of Demandforce: Pursuing Entrepreneurial Dreams
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Demandforce: Pursuing Entrepreneurial Dreams case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Df Demandforce, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Df Demandforce 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 Demandforce: Pursuing Entrepreneurial Dreams can be done for the following purposes –
1. Strategic planning using facts provided in Demandforce: Pursuing Entrepreneurial Dreams case study
2. Improving business portfolio management of Df Demandforce
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 Df Demandforce
Strengths Demandforce: Pursuing Entrepreneurial Dreams | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Df Demandforce in Demandforce: Pursuing Entrepreneurial Dreams Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Df Demandforce in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Df Demandforce in the sector have low bargaining power. Demandforce: Pursuing Entrepreneurial Dreams has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Df Demandforce to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Df Demandforce 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
– Df Demandforce has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Df Demandforce to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Df Demandforce is present in almost all the verticals within the industry. This has provided firm in Demandforce: Pursuing Entrepreneurial Dreams 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.
Successful track record of launching new products
– Df Demandforce has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Df Demandforce 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.
Ability to lead change in Innovation & Entrepreneurship field
– Df Demandforce 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 Df Demandforce in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Df Demandforce
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Df Demandforce does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Df Demandforce is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Demandforce: Pursuing Entrepreneurial Dreams firm has clearly differentiated products in the market place. This has enabled Df Demandforce to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Df Demandforce to invest into research and development (R&D) and innovation.
Training and development
– Df Demandforce has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Demandforce: Pursuing Entrepreneurial Dreams Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Df Demandforce 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 Demandforce: Pursuing Entrepreneurial Dreams HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Demandforce: Pursuing Entrepreneurial Dreams | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Demandforce: Pursuing Entrepreneurial Dreams are -
Increasing silos among functional specialists
– The organizational structure of Df Demandforce is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Df Demandforce needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Df Demandforce 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 Demandforce: Pursuing Entrepreneurial Dreams 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 Df Demandforce 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Df Demandforce is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Demandforce: Pursuing Entrepreneurial Dreams can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Demandforce: Pursuing Entrepreneurial Dreams, it seems that the employees of Df Demandforce 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.
Interest costs
– Compare to the competition, Df Demandforce 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.
Lack of clear differentiation of Df Demandforce products
– To increase the profitability and margins on the products, Df Demandforce 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, Df Demandforce 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 Df Demandforce supply chain. Even after few cautionary changes mentioned in the HBR case study - Demandforce: Pursuing Entrepreneurial Dreams, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Df Demandforce vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Demandforce: Pursuing Entrepreneurial Dreams, in the dynamic environment Df Demandforce has struggled to respond to the nimble upstart competition. Df Demandforce has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Df Demandforce 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. Df Demandforce 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.
High cash cycle compare to competitors
Df Demandforce 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 Demandforce: Pursuing Entrepreneurial Dreams | 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 Demandforce: Pursuing Entrepreneurial Dreams are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Df Demandforce 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 Df Demandforce to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Df Demandforce can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Demandforce: Pursuing Entrepreneurial Dreams 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, Df Demandforce is facing challenges because of the dominance of functional experts in the organization. Demandforce: Pursuing Entrepreneurial Dreams 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.
Using analytics as competitive advantage
– Df Demandforce 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 Demandforce: Pursuing Entrepreneurial Dreams - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Df Demandforce 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 Df Demandforce 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.
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. Df Demandforce can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Df Demandforce 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. Df Demandforce 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.
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 Df Demandforce 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.
Manufacturing automation
– Df Demandforce 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.
Learning at scale
– Online learning technologies has now opened space for Df Demandforce 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Df Demandforce can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Df Demandforce can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Df Demandforce can use these opportunities to build new business models that can help the communities that Df Demandforce operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Threats Demandforce: Pursuing Entrepreneurial Dreams External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Demandforce: Pursuing Entrepreneurial Dreams are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Df Demandforce 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.
Regulatory challenges
– Df Demandforce 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.
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 Df Demandforce in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Df Demandforce is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Df Demandforce needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Environmental challenges
– Df Demandforce 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. Df Demandforce can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Df Demandforce business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Df Demandforce 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Df Demandforce 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 Demandforce: Pursuing Entrepreneurial Dreams .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Df Demandforce with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Demandforce: Pursuing Entrepreneurial Dreams, Df Demandforce 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 .
Weighted SWOT Analysis of Demandforce: Pursuing Entrepreneurial Dreams 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 Demandforce: Pursuing Entrepreneurial Dreams 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 Demandforce: Pursuing Entrepreneurial Dreams 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 Demandforce: Pursuing Entrepreneurial Dreams 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 Demandforce: Pursuing Entrepreneurial Dreams 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 Df Demandforce needs to make to build a sustainable competitive advantage.
