Case Study Description of NASDAQ OMX: The Facebook Debacle
Senior management of a large stock exchange is reviewing a recent software problem that resulted in a botched opening for the initial public offering of a popular social media company. They are drawing up a list of recommendations on how to prevent this type of failure in the future, taking into account the needs of their various stakeholders, including customers, market makers, listed firms, regulators and shareholders. Overviews of the stock market, NASDAQ in particular, and the use of technology to trade stocks securely and quickly are followed by examining the aftermath of a delay in the correct trading of Facebook shares on its opening.
Authors :: Deborah Compeau, Craig Dunbar, Michael R King, Ken Mark
Swot Analysis of "NASDAQ OMX: The Facebook Debacle" written by Deborah Compeau, Craig Dunbar, Michael R King, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nasdaq Facebook facing as an external strategic factors. Some of the topics covered in NASDAQ OMX: The Facebook Debacle case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the NASDAQ OMX: The Facebook Debacle casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing energy prices, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, increasing commodity prices, etc
Introduction to SWOT Analysis of NASDAQ OMX: The Facebook Debacle
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NASDAQ OMX: The Facebook Debacle case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nasdaq Facebook, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nasdaq Facebook 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 NASDAQ OMX: The Facebook Debacle can be done for the following purposes –
1. Strategic planning using facts provided in NASDAQ OMX: The Facebook Debacle case study
2. Improving business portfolio management of Nasdaq Facebook
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nasdaq Facebook
Strengths NASDAQ OMX: The Facebook Debacle | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nasdaq Facebook in NASDAQ OMX: The Facebook Debacle Harvard Business Review case study are -
Training and development
– Nasdaq Facebook has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in NASDAQ OMX: The Facebook Debacle 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.
Analytics focus
– Nasdaq Facebook 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 Deborah Compeau, Craig Dunbar, Michael R King, 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.
Superior customer experience
– The customer experience strategy of Nasdaq Facebook in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Nasdaq Facebook is present in almost all the verticals within the industry. This has provided firm in NASDAQ OMX: The Facebook Debacle 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.
Effective Research and Development (R&D)
– Nasdaq Facebook 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 NASDAQ OMX: The Facebook Debacle - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Nasdaq Facebook has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nasdaq Facebook to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Leadership & Managing People field
– Nasdaq Facebook 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 Nasdaq Facebook in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Nasdaq Facebook is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Nasdaq Facebook 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 NASDAQ OMX: The Facebook Debacle HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Nasdaq Facebook has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nasdaq Facebook 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.
Ability to recruit top talent
– Nasdaq Facebook is one of the leading recruiters in the industry. Managers in the NASDAQ OMX: The Facebook Debacle are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– NASDAQ OMX: The Facebook Debacle firm has clearly differentiated products in the market place. This has enabled Nasdaq Facebook to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Nasdaq Facebook to invest into research and development (R&D) and innovation.
Weaknesses NASDAQ OMX: The Facebook Debacle | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NASDAQ OMX: The Facebook Debacle are -
Slow to strategic competitive environment developments
– As NASDAQ OMX: The Facebook Debacle HBR case study mentions - Nasdaq Facebook 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.
Capital Spending Reduction
– Even during the low interest decade, Nasdaq Facebook 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Nasdaq Facebook 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.
Low market penetration in new markets
– Outside its home market of Nasdaq Facebook, firm in the HBR case study NASDAQ OMX: The Facebook Debacle needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Nasdaq Facebook 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the NASDAQ OMX: The Facebook Debacle 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 Nasdaq Facebook has relatively successful track record of launching new products.
Products dominated business model
– Even though Nasdaq Facebook 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 - NASDAQ OMX: The Facebook Debacle should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Nasdaq Facebook 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. Nasdaq Facebook 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.
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 Nasdaq Facebook supply chain. Even after few cautionary changes mentioned in the HBR case study - NASDAQ OMX: The Facebook Debacle, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nasdaq Facebook vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study NASDAQ OMX: The Facebook Debacle, it seems that the employees of Nasdaq Facebook 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 operating costs
– Compare to the competitors, firm in the HBR case study NASDAQ OMX: The Facebook Debacle 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 Nasdaq Facebook 's lucrative customers.
Opportunities NASDAQ OMX: The Facebook Debacle | 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 NASDAQ OMX: The Facebook Debacle are -
Better consumer reach
– The expansion of the 5G network will help Nasdaq Facebook to increase its market reach. Nasdaq Facebook 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nasdaq Facebook is facing challenges because of the dominance of functional experts in the organization. NASDAQ OMX: The Facebook Debacle 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nasdaq Facebook 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, NASDAQ OMX: The Facebook Debacle, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nasdaq Facebook 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. Nasdaq Facebook 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.
Leveraging digital technologies
– Nasdaq Facebook 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.
Loyalty marketing
– Nasdaq Facebook 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 Nasdaq Facebook can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Nasdaq Facebook can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Creating value in data economy
– The success of analytics program of Nasdaq Facebook has opened avenues for new revenue streams for the organization in the industry. This can help Nasdaq Facebook to build a more holistic ecosystem as suggested in the NASDAQ OMX: The Facebook Debacle case study. Nasdaq Facebook can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Nasdaq Facebook can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Nasdaq Facebook can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. NASDAQ OMX: The Facebook Debacle 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.
Building a culture of innovation
– managers at Nasdaq Facebook 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 Leadership & Managing People 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 Nasdaq Facebook in the consumer business. Now Nasdaq Facebook can target international markets with far fewer capital restrictions requirements than the existing system.
Threats NASDAQ OMX: The Facebook Debacle External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NASDAQ OMX: The Facebook Debacle are -
Technology acceleration in Forth Industrial Revolution
– Nasdaq Facebook has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Nasdaq Facebook needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 Nasdaq Facebook business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Nasdaq Facebook 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study NASDAQ OMX: The Facebook Debacle, Nasdaq Facebook may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nasdaq Facebook in the Leadership & Managing People industry. The Leadership & Managing People 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 Nasdaq Facebook with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Nasdaq Facebook 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
– Nasdaq Facebook 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. Nasdaq Facebook can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Regulatory challenges
– Nasdaq Facebook 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 Leadership & Managing People industry regulations.
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 Nasdaq Facebook.
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. Nasdaq Facebook needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Nasdaq Facebook 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nasdaq Facebook can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of NASDAQ OMX: The Facebook Debacle 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 NASDAQ OMX: The Facebook Debacle 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 NASDAQ OMX: The Facebook Debacle 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 NASDAQ OMX: The Facebook Debacle 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 NASDAQ OMX: The Facebook Debacle 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 Nasdaq Facebook needs to make to build a sustainable competitive advantage.