Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing
The case centers on Shilling & Smith's acquisition of Xteria Inc. and the resulting need to quickly scale the company's IT infrastructure to accommodate the acquisition. The case is based on a real leasing problem faced by a major retail firm in the Chicago area when it purchased a small credit card processing firm and scaled the operations to handle the retail firm's credit card transactions. The CIO of Shilling & Smith needs to determine which lease option is the best means of providing the technical infrastructure needed to support the firm after the acquisition of Xteria. Several issues will drive this decision, including the value and useful life of the equipment, as well as the strategic context of the firm. This case examines how to evaluate different lease options when acquiring data center information technology infrastructure. Specifically, the case addresses software vs. hardware leasing, different lease terms, and choosing between different lease structures depending on the strategy and needs of a company. This case enables students to understand the different types of technology leases and in which situations these leases would be employed.
Authors :: Mark Jeffery, Cassidy Shield, H. Nevin Ekici, Mike Conley
Swot Analysis of "Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing" written by Mark Jeffery, Cassidy Shield, H. Nevin Ekici, Mike Conley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xteria Shilling facing as an external strategic factors. Some of the topics covered in Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing case study are - Strategic Management Strategies, Financial management, IT, Mergers & acquisitions and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing casestudy better are - – wage bills are increasing, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing commodity prices,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xteria Shilling, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xteria Shilling 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 Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing can be done for the following purposes –
1. Strategic planning using facts provided in Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing case study
2. Improving business portfolio management of Xteria Shilling
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 Xteria Shilling
Strengths Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xteria Shilling in Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing Harvard Business Review case study are -
Strong track record of project management
– Xteria Shilling 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 Leadership & Managing People industry
– Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing firm has clearly differentiated products in the market place. This has enabled Xteria Shilling to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Xteria Shilling to invest into research and development (R&D) and innovation.
High brand equity
– Xteria Shilling has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xteria Shilling to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Xteria Shilling has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xteria Shilling 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.
Analytics focus
– Xteria Shilling 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 Mark Jeffery, Cassidy Shield, H. Nevin Ekici, Mike Conley 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.
Highly skilled collaborators
– Xteria Shilling 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 Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Xteria Shilling is one of the leading recruiters in the industry. Managers in the Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Xteria Shilling digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xteria Shilling 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.
Cross disciplinary teams
– Horizontal connected teams at the Xteria Shilling 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.
Low bargaining power of suppliers
– Suppliers of Xteria Shilling in the sector have low bargaining power. Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xteria Shilling to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Xteria Shilling 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.
Superior customer experience
– The customer experience strategy of Xteria Shilling in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing are -
Workers concerns about automation
– As automation is fast increasing in the segment, Xteria Shilling 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing, it seems that the employees of Xteria Shilling 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 Xteria Shilling, firm in the HBR case study Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Aligning sales with marketing
– It come across in the case study Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing 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 Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing can leverage the sales team experience to cultivate customer relationships as Xteria Shilling is planning to shift buying processes online.
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 Xteria Shilling supply chain. Even after few cautionary changes mentioned in the HBR case study - Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xteria Shilling vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing, is just above the industry average. Xteria Shilling 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Mark Jeffery, Cassidy Shield, H. Nevin Ekici, Mike Conley suggests that, Xteria Shilling 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.
Lack of clear differentiation of Xteria Shilling products
– To increase the profitability and margins on the products, Xteria Shilling needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Xteria Shilling 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.
Slow to strategic competitive environment developments
– As Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing HBR case study mentions - Xteria Shilling 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.
Opportunities Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing | 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 Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing are -
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. Xteria Shilling 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. Xteria Shilling 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
– Xteria Shilling 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.
Building a culture of innovation
– managers at Xteria Shilling 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xteria Shilling can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Xteria Shilling to increase its market reach. Xteria Shilling 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xteria Shilling in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People 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 Xteria Shilling 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, Xteria Shilling can use these opportunities to build new business models that can help the communities that Xteria Shilling operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Creating value in data economy
– The success of analytics program of Xteria Shilling has opened avenues for new revenue streams for the organization in the industry. This can help Xteria Shilling to build a more holistic ecosystem as suggested in the Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing case study. Xteria Shilling can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xteria Shilling can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Xteria Shilling can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing 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.
Manufacturing automation
– Xteria Shilling 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.
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. Xteria Shilling can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Xteria Shilling 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.
Stagnating economy with rate increase
– Xteria Shilling 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xteria Shilling 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 Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing .
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. Xteria Shilling needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing, Xteria Shilling 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 .
Environmental challenges
– Xteria Shilling 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. Xteria Shilling can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Xteria Shilling
– 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 Xteria Shilling.
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 Xteria Shilling business can come under increasing regulations regarding data privacy, data security, etc.
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. Xteria Shilling can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Xteria Shilling in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Xteria Shilling.
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. Xteria Shilling 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.
Consumer confidence and its impact on Xteria Shilling 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.
Weighted SWOT Analysis of Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing 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 Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing 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 Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing 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 Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing 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 Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing 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 Xteria Shilling needs to make to build a sustainable competitive advantage.
