Frontstep in Russia (C) : Epilogue: Ownership Transition SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Frontstep in Russia (C) : Epilogue: Ownership Transition
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 (C) : Epilogue: Ownership Transition" 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 (C) : Epilogue: Ownership Transition 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 (C) : Epilogue: Ownership Transition casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing transportation and logistics costs,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Frontstep in Russia (C) : Epilogue: Ownership Transition
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Frontstep in Russia (C) : Epilogue: Ownership Transition 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 (C) : Epilogue: Ownership Transition can be done for the following purposes –
1. Strategic planning using facts provided in Frontstep in Russia (C) : Epilogue: Ownership Transition 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 (C) : Epilogue: Ownership Transition | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Frontstep Russia in Frontstep in Russia (C) : Epilogue: Ownership Transition Harvard Business Review case study are -
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 (C) : Epilogue: Ownership Transition - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Frontstep Russia is one of the leading recruiters in the industry. Managers in the Frontstep in Russia (C) : Epilogue: Ownership Transition are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 (C) : Epilogue: Ownership Transition HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Frontstep Russia is one of the most innovative firm in sector. Manager in Frontstep in Russia (C) : Epilogue: Ownership Transition Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Frontstep Russia 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 Manfred F.R. Kets de Vries, Konstantin Korotov, Elizabeth Florent-Treacy 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.
Training and development
– Frontstep Russia has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Frontstep in Russia (C) : Epilogue: Ownership Transition 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.
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.
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.
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.
High brand equity
– Frontstep Russia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Frontstep Russia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Frontstep in Russia (C) : Epilogue: Ownership Transition firm has clearly differentiated products in the market place. This has enabled Frontstep Russia to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Frontstep Russia to invest into research and development (R&D) and innovation.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Frontstep Russia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Frontstep Russia 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.
Weaknesses Frontstep in Russia (C) : Epilogue: Ownership Transition | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Frontstep in Russia (C) : Epilogue: Ownership Transition are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Frontstep in Russia (C) : Epilogue: Ownership Transition, is just above the industry average. Frontstep Russia 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Frontstep in Russia (C) : Epilogue: Ownership Transition, it seems that the employees of Frontstep Russia 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Frontstep Russia 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Frontstep in Russia (C) : Epilogue: Ownership Transition, in the dynamic environment Frontstep Russia has struggled to respond to the nimble upstart competition. Frontstep Russia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Frontstep Russia has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Frontstep in Russia (C) : Epilogue: Ownership Transition 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.
No frontier risks strategy
– After analyzing the HBR case study Frontstep in Russia (C) : Epilogue: Ownership Transition, 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.
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.
Slow decision making process
– As mentioned earlier in the report, Frontstep Russia 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. Frontstep Russia 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 Frontstep in Russia (C) : Epilogue: Ownership Transition 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 (C) : Epilogue: Ownership Transition can leverage the sales team experience to cultivate customer relationships as Frontstep Russia is planning to shift buying processes online.
High cash cycle compare to competitors
Frontstep Russia 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 Frontstep in Russia (C) : Epilogue: Ownership Transition | 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 (C) : Epilogue: Ownership Transition are -
Leveraging digital technologies
– Frontstep Russia 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.
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.
Learning at scale
– Online learning technologies has now opened space for Frontstep Russia 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.
Loyalty marketing
– Frontstep Russia has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Frontstep Russia 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 Frontstep in Russia (C) : Epilogue: Ownership Transition - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Frontstep Russia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
Creating value in data economy
– The success of analytics program of Frontstep Russia has opened avenues for new revenue streams for the organization in the industry. This can help Frontstep Russia to build a more holistic ecosystem as suggested in the Frontstep in Russia (C) : Epilogue: Ownership Transition case study. Frontstep Russia can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Frontstep Russia in the consumer business. Now Frontstep Russia can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Frontstep Russia 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.
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.
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 (C) : Epilogue: Ownership Transition 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 (C) : Epilogue: Ownership Transition are -
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.
Consumer confidence and its impact on Frontstep Russia 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Frontstep in Russia (C) : Epilogue: Ownership Transition, Frontstep Russia 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 .
Regulatory challenges
– Frontstep Russia 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.
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.
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.
Increasing wage structure of Frontstep Russia
– 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 Frontstep Russia.
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.
High dependence on third party suppliers
– Frontstep Russia 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, 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 (C) : Epilogue: Ownership Transition .
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.
Shortening product life cycle
– it is one of the major threat that Frontstep Russia is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Weighted SWOT Analysis of Frontstep in Russia (C) : Epilogue: Ownership Transition 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 (C) : Epilogue: Ownership Transition 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 (C) : Epilogue: Ownership Transition 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 (C) : Epilogue: Ownership Transition 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 (C) : Epilogue: Ownership Transition 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.
