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 - – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing commodity prices, 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 -
Strong track record of project management
– Elance Disintermediation 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
– eLance.com: Preventing Disintermediation firm has clearly differentiated products in the market place. This has enabled Elance Disintermediation to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Elance Disintermediation to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
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.
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.
Effective Research and Development (R&D)
– Elance Disintermediation 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 eLance.com: Preventing Disintermediation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Learning organization
- Elance Disintermediation 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 Elance Disintermediation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in eLance.com: Preventing Disintermediation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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 -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Elance Disintermediation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study eLance.com: Preventing Disintermediation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Scott Schneberger, Ken Mark suggests that, Elance Disintermediation is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study eLance.com: Preventing Disintermediation, is just above the industry average. Elance Disintermediation 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.
Aligning sales with marketing
– It come across in the case study eLance.com: Preventing Disintermediation 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 eLance.com: Preventing Disintermediation can leverage the sales team experience to cultivate customer relationships as Elance Disintermediation is planning to shift buying processes online.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study eLance.com: Preventing Disintermediation 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 Elance Disintermediation 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Elance Disintermediation 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. Elance Disintermediation 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.
Lack of clear differentiation of Elance Disintermediation products
– To increase the profitability and margins on the products, Elance Disintermediation needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
Developing new processes and practices
– Elance Disintermediation 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.
Buying journey improvements
– Elance Disintermediation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. eLance.com: Preventing Disintermediation 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.
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.
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.
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 Elance Disintermediation 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.
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.
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. Elance Disintermediation 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. Elance Disintermediation 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.
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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Elance Disintermediation can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, eLance.com: Preventing Disintermediation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
Environmental challenges
– Elance Disintermediation 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. Elance Disintermediation can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Elance Disintermediation is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Elance Disintermediation in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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.
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. Elance Disintermediation needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Elance Disintermediation.
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 .
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.