Going Places: The Buy-out of Amadeus Global Travel Distribution SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Going Places: The Buy-out of Amadeus Global Travel Distribution
In 2004, BC Partners is considering an investment in Amadeus, a major IT player in the global airlines and travel industry. In order to win in a very competitive auction BC Partners needs to evaluate two distinct business strategies as to their risk-return profile and impact on financing structure.
Swot Analysis of "Going Places: The Buy-out of Amadeus Global Travel Distribution" written by Nikhil Malik, Michael Prahl includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amadeus Bc facing as an external strategic factors. Some of the topics covered in Going Places: The Buy-out of Amadeus Global Travel Distribution case study are - Strategic Management Strategies, Growth strategy, Marketing, Mergers & acquisitions, Strategy execution, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Going Places: The Buy-out of Amadeus Global Travel Distribution casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, there is backlash against globalization, challanges to central banks by blockchain based private currencies,
supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Going Places: The Buy-out of Amadeus Global Travel Distribution
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Going Places: The Buy-out of Amadeus Global Travel Distribution case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amadeus Bc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amadeus Bc 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 Going Places: The Buy-out of Amadeus Global Travel Distribution can be done for the following purposes –
1. Strategic planning using facts provided in Going Places: The Buy-out of Amadeus Global Travel Distribution case study
2. Improving business portfolio management of Amadeus Bc
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 Amadeus Bc
Strengths Going Places: The Buy-out of Amadeus Global Travel Distribution | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amadeus Bc in Going Places: The Buy-out of Amadeus Global Travel Distribution Harvard Business Review case study are -
Ability to recruit top talent
– Amadeus Bc is one of the leading recruiters in the industry. Managers in the Going Places: The Buy-out of Amadeus Global Travel Distribution are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Innovation & Entrepreneurship field
– Amadeus Bc 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 Amadeus Bc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Amadeus Bc in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Amadeus Bc 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 Going Places: The Buy-out of Amadeus Global Travel Distribution HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Amadeus Bc in the sector have low bargaining power. Going Places: The Buy-out of Amadeus Global Travel Distribution has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Amadeus Bc to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Amadeus Bc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amadeus Bc 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.
Innovation driven organization
– Amadeus Bc is one of the most innovative firm in sector. Manager in Going Places: The Buy-out of Amadeus Global Travel Distribution Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Amadeus Bc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Amadeus Bc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Amadeus Bc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Amadeus Bc 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)
– Amadeus Bc 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 Going Places: The Buy-out of Amadeus Global Travel Distribution - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Amadeus Bc is present in almost all the verticals within the industry. This has provided firm in Going Places: The Buy-out of Amadeus Global Travel Distribution 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.
Learning organization
- Amadeus Bc 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 Amadeus Bc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Going Places: The Buy-out of Amadeus Global Travel Distribution Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Going Places: The Buy-out of Amadeus Global Travel Distribution | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Going Places: The Buy-out of Amadeus Global Travel Distribution are -
Interest costs
– Compare to the competition, Amadeus Bc 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 Going Places: The Buy-out of Amadeus Global Travel Distribution, is just above the industry average. Amadeus Bc 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.
Low market penetration in new markets
– Outside its home market of Amadeus Bc, firm in the HBR case study Going Places: The Buy-out of Amadeus Global Travel Distribution needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Going Places: The Buy-out of Amadeus Global Travel Distribution 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 Going Places: The Buy-out of Amadeus Global Travel Distribution can leverage the sales team experience to cultivate customer relationships as Amadeus Bc is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Amadeus Bc has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Going Places: The Buy-out of Amadeus Global Travel Distribution 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 Amadeus Bc 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Amadeus Bc is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Amadeus Bc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Amadeus Bc to focus more on services rather than just following the product oriented approach.
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 Amadeus Bc supply chain. Even after few cautionary changes mentioned in the HBR case study - Going Places: The Buy-out of Amadeus Global Travel Distribution, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amadeus Bc vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Amadeus Bc 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 - Going Places: The Buy-out of Amadeus Global Travel Distribution should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Amadeus Bc 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 Going Places: The Buy-out of Amadeus Global Travel Distribution, in the dynamic environment Amadeus Bc has struggled to respond to the nimble upstart competition. Amadeus Bc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Going Places: The Buy-out of Amadeus Global Travel Distribution | 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 Going Places: The Buy-out of Amadeus Global Travel Distribution are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Amadeus Bc is facing challenges because of the dominance of functional experts in the organization. Going Places: The Buy-out of Amadeus Global Travel Distribution 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.
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. Amadeus Bc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Amadeus Bc has opened avenues for new revenue streams for the organization in the industry. This can help Amadeus Bc to build a more holistic ecosystem as suggested in the Going Places: The Buy-out of Amadeus Global Travel Distribution case study. Amadeus Bc can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Amadeus Bc 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. Amadeus Bc 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, Amadeus Bc can use these opportunities to build new business models that can help the communities that Amadeus Bc operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 Amadeus Bc in the consumer business. Now Amadeus Bc can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amadeus Bc 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 Amadeus Bc to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Amadeus Bc can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Going Places: The Buy-out of Amadeus Global Travel Distribution 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.
Learning at scale
– Online learning technologies has now opened space for Amadeus Bc 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
– Amadeus Bc 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amadeus Bc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Amadeus Bc 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 Amadeus Bc to increase its market reach. Amadeus Bc 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 Going Places: The Buy-out of Amadeus Global Travel Distribution External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Going Places: The Buy-out of Amadeus Global Travel Distribution are -
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. Amadeus Bc 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.
Environmental challenges
– Amadeus Bc 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. Amadeus Bc can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Increasing wage structure of Amadeus Bc
– 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 Amadeus Bc.
Technology acceleration in Forth Industrial Revolution
– Amadeus Bc has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Amadeus Bc 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.
Regulatory challenges
– Amadeus Bc 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Going Places: The Buy-out of Amadeus Global Travel Distribution, Amadeus Bc 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 .
Consumer confidence and its impact on Amadeus Bc 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.
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 Amadeus Bc business can come under increasing regulations regarding data privacy, data security, etc.
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. Amadeus Bc 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 Amadeus Bc in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Amadeus Bc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amadeus Bc 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 Going Places: The Buy-out of Amadeus Global Travel Distribution .
Weighted SWOT Analysis of Going Places: The Buy-out of Amadeus Global Travel Distribution 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 Going Places: The Buy-out of Amadeus Global Travel Distribution 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 Going Places: The Buy-out of Amadeus Global Travel Distribution 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 Going Places: The Buy-out of Amadeus Global Travel Distribution 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 Going Places: The Buy-out of Amadeus Global Travel Distribution 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 Amadeus Bc needs to make to build a sustainable competitive advantage.
