Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo
Famous for the hit game "Angry Birds", game developer and entertainment company Rovio is an example of outstanding entrepreneurship. This case analyses the factors that made its base in Espoo, Finland, an attractive place and contributed to the start-up's overall success as it became a world leader in mobile gaming.
Swot Analysis of "Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo" written by Sami Mahroum, Elizabeth Scott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rovio Espoo facing as an external strategic factors. Some of the topics covered in Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo case study are - Strategic Management Strategies, Entrepreneurship, Ethics, Influence, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo casestudy better are - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions,
there is increasing trade war between United States & China, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rovio Espoo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rovio Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo can be done for the following purposes –
1. Strategic planning using facts provided in Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo case study
2. Improving business portfolio management of Rovio Espoo
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 Rovio Espoo
Strengths Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rovio Espoo in Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo Harvard Business Review case study are -
High switching costs
– The high switching costs that Rovio Espoo has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Diverse revenue streams
– Rovio Espoo is present in almost all the verticals within the industry. This has provided firm in Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Rovio Espoo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rovio Espoo 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.
Effective Research and Development (R&D)
– Rovio Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Rovio Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Rovio Espoo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rovio Espoo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Rovio Espoo 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 Rovio Espoo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Rovio Espoo 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 Sami Mahroum, Elizabeth Scott 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.
Innovation driven organization
– Rovio Espoo is one of the most innovative firm in sector. Manager in Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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.
High brand equity
– Rovio Espoo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rovio Espoo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Rovio Espoo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo are -
No frontier risks strategy
– After analyzing the HBR case study Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo, 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.
Slow to strategic competitive environment developments
– As Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo HBR case study mentions - Rovio Espoo 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.
Increasing silos among functional specialists
– The organizational structure of Rovio Espoo is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Rovio Espoo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rovio Espoo to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Rovio Espoo 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 - Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rovio Espoo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo, is just above the industry average. Rovio Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo can leverage the sales team experience to cultivate customer relationships as Rovio Espoo is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Rovio Espoo needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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 Rovio Espoo 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 Rovio Espoo supply chain. Even after few cautionary changes mentioned in the HBR case study - Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rovio Espoo vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Rovio Espoo 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.
Opportunities Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo | 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo are -
Developing new processes and practices
– Rovio Espoo 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rovio Espoo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Rovio Espoo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Rovio Espoo 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
– Rovio Espoo 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rovio Espoo 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.
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 Rovio Espoo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rovio Espoo can use these opportunities to build new business models that can help the communities that Rovio Espoo operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Building a culture of innovation
– managers at Rovio Espoo 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.
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 Rovio Espoo in the consumer business. Now Rovio Espoo can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Rovio Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rovio Espoo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Rovio Espoo 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rovio Espoo is facing challenges because of the dominance of functional experts in the organization. Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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.
Threats Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rovio Espoo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Rovio Espoo
– 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 Rovio Espoo.
Regulatory challenges
– Rovio Espoo 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.
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 Rovio Espoo business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Rovio Espoo 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. Rovio Espoo can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Consumer confidence and its impact on Rovio Espoo 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.
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 Rovio Espoo in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo, Rovio Espoo 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 .
High dependence on third party suppliers
– Rovio Espoo 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.
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. Rovio Espoo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Rovio Espoo.
Shortening product life cycle
– it is one of the major threat that Rovio Espoo is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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 Rovio Entertainment: A Case Study of How Rovio Derived "Place Surplus" in the Finnish City of Espoo 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 Rovio Espoo needs to make to build a sustainable competitive advantage.
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