Case Study Description of ChatChat (Co-Founders Version)
This is a role-play case, intended for use in a leadership development course for MBA students. The case has four roles: two for students playing the co-founders of a startup and two for students/coaches playing the venture capitalists deciding whether or not to provide seed funding. There are two versions of the case, one for students playing the co-founders (L-25CF), and one for those playing the venture capitalists (L-25VC). While both versions of the case contain identical background information for the role-play, L-25CF includes additional information that is available only to the co-founders and L-25VC contains additional information that is available only to the venture capitalists. The role-play objectives stated in the case can be accomplished if the students playing the co-founders successfully identify and address the questions and concerns of those playing the venture capitalists. The co-founders must solicit and grasp the underlining concerns of the venture capitalists, decide how to react and address those concerns, and reassure the venture capitalists that a seed investment is worthwhile. All students have the opportunity to demonstrate active listening, inquiry, and feedback regarding the concerns and proposals to address them. All four individuals in the role play have varying objectives and interests and need to manage the expectations and perceptions of the others in a manner that may be assertive, collaborative, or both.
Swot Analysis of "ChatChat (Co-Founders Version)" written by Lara Tiedens, Davina Drabkin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Capitalists Playing facing as an external strategic factors. Some of the topics covered in ChatChat (Co-Founders Version) case study are - Strategic Management Strategies, Leadership, Negotiations, Venture capital and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the ChatChat (Co-Founders Version) casestudy better are - – there is backlash against globalization, talent flight as more people leaving formal jobs, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of ChatChat (Co-Founders Version)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ChatChat (Co-Founders Version) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Capitalists Playing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Capitalists Playing 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 ChatChat (Co-Founders Version) can be done for the following purposes –
1. Strategic planning using facts provided in ChatChat (Co-Founders Version) case study
2. Improving business portfolio management of Capitalists Playing
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 Capitalists Playing
Strengths ChatChat (Co-Founders Version) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Capitalists Playing in ChatChat (Co-Founders Version) Harvard Business Review case study are -
Organizational Resilience of Capitalists Playing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Capitalists Playing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Capitalists Playing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Capitalists Playing 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.
Operational resilience
– The operational resilience strategy in the ChatChat (Co-Founders 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.
Ability to recruit top talent
– Capitalists Playing is one of the leading recruiters in the industry. Managers in the ChatChat (Co-Founders 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– ChatChat (Co-Founders Version) firm has clearly differentiated products in the market place. This has enabled Capitalists Playing to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Capitalists Playing to invest into research and development (R&D) and innovation.
Analytics focus
– Capitalists Playing 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 Lara Tiedens, Davina Drabkin 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.
Low bargaining power of suppliers
– Suppliers of Capitalists Playing in the sector have low bargaining power. ChatChat (Co-Founders Version) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Capitalists Playing to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Capitalists Playing 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 ChatChat (Co-Founders Version) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Capitalists Playing is present in almost all the verticals within the industry. This has provided firm in ChatChat (Co-Founders Version) 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.
High switching costs
– The high switching costs that Capitalists Playing 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.
Effective Research and Development (R&D)
– Capitalists Playing 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 ChatChat (Co-Founders Version) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Capitalists Playing 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 Capitalists Playing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses ChatChat (Co-Founders Version) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ChatChat (Co-Founders Version) are -
Interest costs
– Compare to the competition, Capitalists Playing 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ChatChat (Co-Founders Version), is just above the industry average. Capitalists Playing 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.
Low market penetration in new markets
– Outside its home market of Capitalists Playing, firm in the HBR case study ChatChat (Co-Founders Version) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Capitalists Playing products
– To increase the profitability and margins on the products, Capitalists Playing needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Capitalists Playing 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. Capitalists Playing 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.
Increasing silos among functional specialists
– The organizational structure of Capitalists Playing is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Capitalists Playing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Capitalists Playing to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study ChatChat (Co-Founders Version) 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 ChatChat (Co-Founders Version) can leverage the sales team experience to cultivate customer relationships as Capitalists Playing is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Capitalists Playing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ChatChat (Co-Founders Version) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study ChatChat (Co-Founders Version), 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.
Need for greater diversity
– Capitalists Playing 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.
Capital Spending Reduction
– Even during the low interest decade, Capitalists Playing 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.
Opportunities ChatChat (Co-Founders 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 ChatChat (Co-Founders Version) are -
Learning at scale
– Online learning technologies has now opened space for Capitalists Playing to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Capitalists Playing 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.
Using analytics as competitive advantage
– Capitalists Playing 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 ChatChat (Co-Founders Version) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Capitalists Playing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Capitalists Playing 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, ChatChat (Co-Founders 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Capitalists Playing 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.
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 Capitalists Playing in the consumer business. Now Capitalists Playing can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Capitalists Playing to increase its market reach. Capitalists Playing 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.
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. Capitalists Playing 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. Capitalists Playing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Capitalists Playing is facing challenges because of the dominance of functional experts in the organization. ChatChat (Co-Founders 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Capitalists Playing to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Capitalists Playing to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Capitalists Playing has opened avenues for new revenue streams for the organization in the industry. This can help Capitalists Playing to build a more holistic ecosystem as suggested in the ChatChat (Co-Founders Version) case study. Capitalists Playing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Capitalists Playing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ChatChat (Co-Founders 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.
Building a culture of innovation
– managers at Capitalists Playing 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.
Threats ChatChat (Co-Founders Version) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ChatChat (Co-Founders Version) are -
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.
Shortening product life cycle
– it is one of the major threat that Capitalists Playing is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Capitalists Playing 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Capitalists Playing 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 ChatChat (Co-Founders Version) .
High dependence on third party suppliers
– Capitalists Playing 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.
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 Capitalists Playing.
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 Capitalists Playing business can come under increasing regulations regarding data privacy, data security, etc.
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. Capitalists Playing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ChatChat (Co-Founders Version), Capitalists Playing 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 .
Increasing wage structure of Capitalists Playing
– 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 Capitalists Playing.
Stagnating economy with rate increase
– Capitalists Playing 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. Capitalists Playing 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 ChatChat (Co-Founders 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 ChatChat (Co-Founders 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 ChatChat (Co-Founders 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 ChatChat (Co-Founders 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 ChatChat (Co-Founders 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 Capitalists Playing needs to make to build a sustainable competitive advantage.