Case Study Description of eLance.com: Preventing Disintermediation
eLance.com allowed buyers to find sellers for time-sensitive project work without limiting bids to sellers within the vicinity of the buyer's physical office. It was just finishing the beta test of its site which had facilitated over 30,000 transactions in the past year. eLance was in the midst of closing its second round of venture financing which would allow it to execute its plan to become the premier online global services marketplace. To do this, it needed to prevent disintermediation - instances when eLance buyers and sellers, after being introduced on the eLance site, decide to conduct future project-related transactions offline. This would prevent eLance from mediating these transactions and gaining revenue from them. eLance had already implemented several customer-focused onsite and offline features to deter disintermediation. The co-founder and vice-president of business development had to determine what incentives were needed to keep customers dealing with each other through the site rather than offline.
Swot Analysis of "eLance.com: Preventing Disintermediation" written by Scott Schneberger, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Elance Disintermediation facing as an external strategic factors. Some of the topics covered in eLance.com: Preventing Disintermediation case study are - Strategic Management Strategies, Strategic planning, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the eLance.com: Preventing Disintermediation casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing energy prices, talent flight as more people leaving formal jobs, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, etc
Introduction to SWOT Analysis of eLance.com: Preventing Disintermediation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in eLance.com: Preventing Disintermediation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Elance Disintermediation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Elance Disintermediation 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 eLance.com: Preventing Disintermediation can be done for the following purposes –
1. Strategic planning using facts provided in eLance.com: Preventing Disintermediation case study
2. Improving business portfolio management of Elance Disintermediation
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 Elance Disintermediation
Strengths eLance.com: Preventing Disintermediation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Elance Disintermediation in eLance.com: Preventing Disintermediation Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Elance Disintermediation in the sector have low bargaining power. eLance.com: Preventing Disintermediation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Elance Disintermediation to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Elance Disintermediation is present in almost all the verticals within the industry. This has provided firm in eLance.com: Preventing Disintermediation 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.
Organizational Resilience of Elance Disintermediation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Elance Disintermediation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Elance Disintermediation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Elance Disintermediation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Elance Disintermediation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in eLance.com: Preventing Disintermediation 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.
Innovation driven organization
– Elance Disintermediation is one of the most innovative firm in sector. Manager in eLance.com: Preventing Disintermediation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the eLance.com: Preventing Disintermediation 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Elance Disintermediation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Elance Disintermediation 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.
Analytics focus
– Elance Disintermediation 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 Scott Schneberger, Ken Mark 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.
Ability to lead change in Innovation & Entrepreneurship field
– Elance Disintermediation 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 Elance Disintermediation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Elance Disintermediation 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 eLance.com: Preventing Disintermediation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Elance Disintermediation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses eLance.com: Preventing Disintermediation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of eLance.com: Preventing Disintermediation are -
Capital Spending Reduction
– Even during the low interest decade, Elance Disintermediation 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.
Increasing silos among functional specialists
– The organizational structure of Elance Disintermediation is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Elance Disintermediation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Elance Disintermediation to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Elance Disintermediation 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the eLance.com: Preventing Disintermediation 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 Elance Disintermediation has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Elance Disintermediation supply chain. Even after few cautionary changes mentioned in the HBR case study - eLance.com: Preventing Disintermediation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Elance Disintermediation vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Elance Disintermediation 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study eLance.com: Preventing Disintermediation, it seems that the employees of Elance Disintermediation 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.
Slow to strategic competitive environment developments
– As eLance.com: Preventing Disintermediation HBR case study mentions - Elance Disintermediation 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.
Skills based hiring
– The stress on hiring functional specialists at Elance Disintermediation 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.
Interest costs
– Compare to the competition, Elance Disintermediation 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study eLance.com: Preventing Disintermediation, in the dynamic environment Elance Disintermediation has struggled to respond to the nimble upstart competition. Elance Disintermediation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities eLance.com: Preventing Disintermediation | 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 eLance.com: Preventing Disintermediation are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Elance Disintermediation is facing challenges because of the dominance of functional experts in the organization. eLance.com: Preventing Disintermediation 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Elance Disintermediation 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.
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. Elance Disintermediation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Elance Disintermediation 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
– Elance Disintermediation 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 eLance.com: Preventing Disintermediation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Elance Disintermediation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Elance Disintermediation to increase its market reach. Elance Disintermediation 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.
Learning at scale
– Online learning technologies has now opened space for Elance Disintermediation 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.
Manufacturing automation
– Elance Disintermediation 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, Elance Disintermediation can use these opportunities to build new business models that can help the communities that Elance Disintermediation operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Elance Disintermediation 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 Elance Disintermediation 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Elance Disintermediation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Elance Disintermediation 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.
Threats eLance.com: Preventing Disintermediation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study eLance.com: Preventing Disintermediation are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study eLance.com: Preventing Disintermediation, Elance Disintermediation 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 .
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 wage structure of Elance Disintermediation
– 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 Elance Disintermediation.
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. Elance Disintermediation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Elance Disintermediation 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.
Regulatory challenges
– Elance Disintermediation 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Elance Disintermediation 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.
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 Elance Disintermediation business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Elance Disintermediation 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.
High dependence on third party suppliers
– Elance Disintermediation 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, Elance Disintermediation 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 eLance.com: Preventing Disintermediation .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Elance Disintermediation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of eLance.com: Preventing Disintermediation 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 eLance.com: Preventing Disintermediation 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 eLance.com: Preventing Disintermediation 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 eLance.com: Preventing Disintermediation 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 eLance.com: Preventing Disintermediation 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 Elance Disintermediation needs to make to build a sustainable competitive advantage.