Case Study Description of CompuSoluciones: Competing against Disintermediation
CompuSoluciones was a value-added distributor of information technology hardware, software, and services based in Guadalajara, Mexico. In 2016, the firm's chief executive officer was aware that the company faced the threat of disintermediation as some of its vendors looked to sell directly to end-users. The industry in which CompuSoluciones competed was known for its rapid technological changes, which affected the design, supply, and price of products, and even the structure of the industry. As an intermediary in the business, CompuSoluciones was threatened by disintermediation, which was enabled by two new technologies: cloud computing and software as a service. If software vendors could interact directly with end-users, they would not need to pay intermediaries (resellers or wholesalers such as CompuSoluciones) to distribute their products. CompuSoluciones's chief executive officer needed to consider what the company could do in the next few months to prevent or slow the process of disintermediation or to participate in the industry in a different way. The decision would have significant implications for the firm's business model.
Authors :: Luis Manuel Bonner de la Mora, W. Glenn Rowe, Ken Mark
Swot Analysis of "CompuSoluciones: Competing against Disintermediation" written by Luis Manuel Bonner de la Mora, W. Glenn Rowe, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Compusoluciones Disintermediation facing as an external strategic factors. Some of the topics covered in CompuSoluciones: Competing against Disintermediation case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the CompuSoluciones: Competing against Disintermediation casestudy better are - – geopolitical disruptions, wage bills are increasing, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of CompuSoluciones: Competing against Disintermediation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CompuSoluciones: Competing against Disintermediation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Compusoluciones Disintermediation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Compusoluciones Disintermediation 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 CompuSoluciones: Competing against Disintermediation can be done for the following purposes –
1. Strategic planning using facts provided in CompuSoluciones: Competing against Disintermediation case study
2. Improving business portfolio management of Compusoluciones Disintermediation
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 Compusoluciones Disintermediation
Strengths CompuSoluciones: Competing against Disintermediation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Compusoluciones Disintermediation in CompuSoluciones: Competing against Disintermediation Harvard Business Review case study are -
High brand equity
– Compusoluciones Disintermediation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Compusoluciones Disintermediation 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
– Compusoluciones Disintermediation 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 Compusoluciones Disintermediation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Compusoluciones Disintermediation in the sector have low bargaining power. CompuSoluciones: Competing against Disintermediation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Compusoluciones Disintermediation to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Compusoluciones Disintermediation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Compusoluciones Disintermediation 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.
Training and development
– Compusoluciones Disintermediation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in CompuSoluciones: Competing against Disintermediation 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Compusoluciones Disintermediation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Compusoluciones Disintermediation 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.
Innovation driven organization
– Compusoluciones Disintermediation is one of the most innovative firm in sector. Manager in CompuSoluciones: Competing against Disintermediation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the CompuSoluciones: Competing against Disintermediation 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.
High switching costs
– The high switching costs that Compusoluciones Disintermediation 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.
Cross disciplinary teams
– Horizontal connected teams at the Compusoluciones Disintermediation 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.
Strong track record of project management
– Compusoluciones Disintermediation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Compusoluciones Disintermediation is one of the leading recruiters in the industry. Managers in the CompuSoluciones: Competing against Disintermediation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses CompuSoluciones: Competing against Disintermediation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CompuSoluciones: Competing against Disintermediation are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Compusoluciones Disintermediation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CompuSoluciones: Competing against Disintermediation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Compusoluciones Disintermediation products
– To increase the profitability and margins on the products, Compusoluciones Disintermediation needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Compusoluciones Disintermediation 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 - CompuSoluciones: Competing against Disintermediation should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Compusoluciones Disintermediation 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.
High cash cycle compare to competitors
Compusoluciones Disintermediation 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.
Interest costs
– Compare to the competition, Compusoluciones Disintermediation 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 CompuSoluciones: Competing against Disintermediation, is just above the industry average. Compusoluciones Disintermediation 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 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 Compusoluciones Disintermediation supply chain. Even after few cautionary changes mentioned in the HBR case study - CompuSoluciones: Competing against Disintermediation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Compusoluciones Disintermediation vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Compusoluciones Disintermediation, firm in the HBR case study CompuSoluciones: Competing against Disintermediation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Compusoluciones Disintermediation 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. Compusoluciones Disintermediation 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 operating costs
– Compare to the competitors, firm in the HBR case study CompuSoluciones: Competing against Disintermediation 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 Compusoluciones Disintermediation 's lucrative customers.
Opportunities CompuSoluciones: Competing against Disintermediation | 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 CompuSoluciones: Competing against Disintermediation are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Compusoluciones Disintermediation is facing challenges because of the dominance of functional experts in the organization. CompuSoluciones: Competing against Disintermediation 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.
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 Compusoluciones Disintermediation in the consumer business. Now Compusoluciones Disintermediation can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Compusoluciones Disintermediation 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Compusoluciones Disintermediation 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 Compusoluciones Disintermediation to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Compusoluciones Disintermediation 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Compusoluciones Disintermediation can use these opportunities to build new business models that can help the communities that Compusoluciones Disintermediation operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Using analytics as competitive advantage
– Compusoluciones Disintermediation 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 CompuSoluciones: Competing against Disintermediation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Compusoluciones Disintermediation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Compusoluciones Disintermediation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Compusoluciones Disintermediation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. CompuSoluciones: Competing against Disintermediation 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.
Loyalty marketing
– Compusoluciones Disintermediation 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.
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. Compusoluciones Disintermediation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Compusoluciones Disintermediation 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.
Learning at scale
– Online learning technologies has now opened space for Compusoluciones Disintermediation 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.
Threats CompuSoluciones: Competing against Disintermediation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CompuSoluciones: Competing against Disintermediation are -
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 Compusoluciones Disintermediation business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Compusoluciones Disintermediation 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 CompuSoluciones: Competing against Disintermediation .
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.
Stagnating economy with rate increase
– Compusoluciones Disintermediation 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.
Consumer confidence and its impact on Compusoluciones Disintermediation 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.
Technology acceleration in Forth Industrial Revolution
– Compusoluciones Disintermediation has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Compusoluciones Disintermediation 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.
Shortening product life cycle
– it is one of the major threat that Compusoluciones Disintermediation is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Compusoluciones Disintermediation
– 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 Compusoluciones Disintermediation.
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. Compusoluciones Disintermediation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Compusoluciones Disintermediation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study CompuSoluciones: Competing against Disintermediation, Compusoluciones Disintermediation 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 .
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. Compusoluciones Disintermediation 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.
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. Compusoluciones Disintermediation needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Weighted SWOT Analysis of CompuSoluciones: Competing against Disintermediation 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 CompuSoluciones: Competing against Disintermediation 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 CompuSoluciones: Competing against Disintermediation 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 CompuSoluciones: Competing against Disintermediation 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 CompuSoluciones: Competing against Disintermediation 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 Compusoluciones Disintermediation needs to make to build a sustainable competitive advantage.