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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, technology disruption, increasing government debt because of Covid-19 spendings, there is backlash against globalization,
supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, 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 -
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.
Training and development
– Capitalists Playing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ChatChat (Co-Founders 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.
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.
Strong track record of project management
– Capitalists Playing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Learning organization
- Capitalists Playing 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 Capitalists Playing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ChatChat (Co-Founders Version) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
High brand equity
– Capitalists Playing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Capitalists Playing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Capitalists Playing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Capitalists Playing 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.
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.
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 -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ChatChat (Co-Founders Version), it seems that the employees of Capitalists Playing 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.
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.
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.
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.
High cash cycle compare to competitors
Capitalists Playing has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 Capitalists Playing supply chain. Even after few cautionary changes mentioned in the HBR case study - ChatChat (Co-Founders Version), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Capitalists Playing vulnerable to further global disruptions in South East Asia.
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.
Products dominated business model
– Even though Capitalists Playing 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 - ChatChat (Co-Founders Version) should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study ChatChat (Co-Founders 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 Capitalists Playing 's lucrative customers.
Slow to strategic competitive environment developments
– As ChatChat (Co-Founders Version) HBR case study mentions - Capitalists Playing takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of 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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Capitalists Playing 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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Capitalists Playing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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. Capitalists Playing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Capitalists Playing can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Loyalty marketing
– Capitalists Playing 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.
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.
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 -
Technology acceleration in Forth Industrial Revolution
– Capitalists Playing has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Capitalists Playing 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.
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 Capitalists Playing in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Environmental challenges
– Capitalists Playing 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. Capitalists Playing can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Capitalists Playing 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.
Consumer confidence and its impact on Capitalists Playing 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Capitalists Playing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Capitalists Playing needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
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 .
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.
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.
