Saffronart.com: Bidding for Success, Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Saffronart.com: Bidding for Success, Chinese Version
To maximize their effectiveness, color cases should be printed in color.Saffronart, a five-year-old online art auction company, leads the market for modern Indian art and now faces competitors in the market it created. Established in 2000 by the wife-and-husband team of Minal and Dinesh Vazirani, Saffronart.com is an innovative online auction firm that specializes in modern and contemporary Indian art. Having been the first firm to offer Indian fine art with authenticity guarantees in an auction setting that increased the transparency of prices, Saffronart succeeded in establishing the genre of modern and contemporary Indian art in the art world, and in creating a market for it. This market, and Saffronart's revenues, grew rapidly from 2000 to 2005. Saffronart's estimate was that the Indian art auction market would be worth $125 million in 2006, with their revenues being $45 million. While this success was gratifying, the firm and its founders faced new internal and external pressures; particularly worrisome was the entry of auction giants Christie's and Sotheby's into the market. The Vaziranis' main challenge now is to consolidate their leading position in the market they created in the face of the unpredictable cyclicality of the secondary art market and increasingly strong competitors. Includes color exhibits.
Swot Analysis of "Saffronart.com: Bidding for Success, Chinese Version" written by Mukti Khaire, R. Daniel Wadhwani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Art Auction facing as an external strategic factors. Some of the topics covered in Saffronart.com: Bidding for Success, Chinese Version case study are - Strategic Management Strategies, Entrepreneurial management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Saffronart.com: Bidding for Success, Chinese Version casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, technology disruption, geopolitical disruptions,
increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Saffronart.com: Bidding for Success, Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Saffronart.com: Bidding for Success, Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Art Auction, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Art Auction 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 Saffronart.com: Bidding for Success, Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in Saffronart.com: Bidding for Success, Chinese Version case study
2. Improving business portfolio management of Art Auction
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 Art Auction
Strengths Saffronart.com: Bidding for Success, Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Art Auction in Saffronart.com: Bidding for Success, Chinese Version Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Art Auction are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Saffronart.com: Bidding for Success, Chinese Version 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.
Organizational Resilience of Art Auction
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Art Auction does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Innovation & Entrepreneurship field
– Art Auction 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 Art Auction in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Art Auction has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Art Auction to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Art Auction has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Art Auction 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.
Superior customer experience
– The customer experience strategy of Art Auction in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Art Auction 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 Art Auction is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Saffronart.com: Bidding for Success, Chinese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Art Auction is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Art Auction is one of the leading recruiters in the industry. Managers in the Saffronart.com: Bidding for Success, Chinese Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Art Auction 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.
Training and development
– Art Auction has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Saffronart.com: Bidding for Success, Chinese Version 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.
Weaknesses Saffronart.com: Bidding for Success, Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Saffronart.com: Bidding for Success, Chinese Version are -
High operating costs
– Compare to the competitors, firm in the HBR case study Saffronart.com: Bidding for Success, Chinese Version 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 Art Auction 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Art Auction 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. Art Auction 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Saffronart.com: Bidding for Success, Chinese Version, is just above the industry average. Art Auction needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Saffronart.com: Bidding for Success, Chinese Version, it seems that the employees of Art Auction 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.
Low market penetration in new markets
– Outside its home market of Art Auction, firm in the HBR case study Saffronart.com: Bidding for Success, Chinese Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Art Auction 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.
No frontier risks strategy
– After analyzing the HBR case study Saffronart.com: Bidding for Success, Chinese Version, 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.
Lack of clear differentiation of Art Auction products
– To increase the profitability and margins on the products, Art Auction needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Art Auction 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 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 Art Auction supply chain. Even after few cautionary changes mentioned in the HBR case study - Saffronart.com: Bidding for Success, Chinese Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Art Auction vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Saffronart.com: Bidding for Success, Chinese Version, in the dynamic environment Art Auction has struggled to respond to the nimble upstart competition. Art Auction has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Saffronart.com: Bidding for Success, Chinese Version | 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 Saffronart.com: Bidding for Success, Chinese Version are -
Loyalty marketing
– Art Auction 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Art Auction is facing challenges because of the dominance of functional experts in the organization. Saffronart.com: Bidding for Success, Chinese Version 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.
Buying journey improvements
– Art Auction can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Saffronart.com: Bidding for Success, Chinese Version 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Art Auction 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, Saffronart.com: Bidding for Success, Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Art Auction 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 Art Auction can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Art Auction can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Art Auction 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.
Manufacturing automation
– Art Auction 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.
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. Art Auction can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Art Auction has opened avenues for new revenue streams for the organization in the industry. This can help Art Auction to build a more holistic ecosystem as suggested in the Saffronart.com: Bidding for Success, Chinese Version case study. Art Auction can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Art Auction 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 Saffronart.com: Bidding for Success, Chinese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Art Auction to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Art Auction in the consumer business. Now Art Auction can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Saffronart.com: Bidding for Success, Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Saffronart.com: Bidding for Success, Chinese Version are -
Regulatory challenges
– Art Auction 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Art Auction 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 Saffronart.com: Bidding for Success, Chinese Version .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Art Auction 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Art Auction with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Art Auction 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 Art Auction.
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. Art Auction 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.
Environmental challenges
– Art Auction 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. Art Auction can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Stagnating economy with rate increase
– Art Auction 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Saffronart.com: Bidding for Success, Chinese Version, Art Auction 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
– Art Auction 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. Art Auction can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Art Auction 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 Saffronart.com: Bidding for Success, Chinese Version 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 Saffronart.com: Bidding for Success, Chinese Version 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 Saffronart.com: Bidding for Success, Chinese Version 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 Saffronart.com: Bidding for Success, Chinese Version 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 Saffronart.com: Bidding for Success, Chinese Version 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 Art Auction needs to make to build a sustainable competitive advantage.