SAP and Cloud Computing in 2012 and Beyond SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of SAP and Cloud Computing in 2012 and Beyond
In 2012, after several failed attempts at establishing a cloud computing solution for its entire Enterprise Resource Planning (ERP) suite, SAP announced two major acquisitions: SuccessFactors, a major SaaS provider for Human Resources software and Ariba, a major SaaS provider of supply chain software. The first acquisition was for $3.4 billion, with a 52 percent premium over SuccessFactors' market value. The second was for $4.3 billion, with a 20 percent premium. The industry press and bloggers saluted this as a strategic shift in SAP's approach to cloud computing. In May 2012, Lars Dalgaard, CEO of SuccessFactors, was appointed head of SAP's Cloud Business, in charge of the entire SAP SaaS strategy. This case explores the decisions, tactics and strategies pursued to turn SAP into a major cloud computing company.
Authors :: Robert A. Burgelman, Jean-Bernard Rolland
Swot Analysis of "SAP and Cloud Computing in 2012 and Beyond" written by Robert A. Burgelman, Jean-Bernard Rolland includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Successfactors Cloud facing as an external strategic factors. Some of the topics covered in SAP and Cloud Computing in 2012 and Beyond case study are - Strategic Management Strategies, Mergers & acquisitions, Pricing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the SAP and Cloud Computing in 2012 and Beyond casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing commodity prices, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, wage bills are increasing, etc
Introduction to SWOT Analysis of SAP and Cloud Computing in 2012 and Beyond
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SAP and Cloud Computing in 2012 and Beyond case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Successfactors Cloud, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Successfactors Cloud 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 SAP and Cloud Computing in 2012 and Beyond can be done for the following purposes –
1. Strategic planning using facts provided in SAP and Cloud Computing in 2012 and Beyond case study
2. Improving business portfolio management of Successfactors Cloud
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 Successfactors Cloud
Strengths SAP and Cloud Computing in 2012 and Beyond | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Successfactors Cloud in SAP and Cloud Computing in 2012 and Beyond Harvard Business Review case study are -
Innovation driven organization
– Successfactors Cloud is one of the most innovative firm in sector. Manager in SAP and Cloud Computing in 2012 and Beyond Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Successfactors Cloud digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Successfactors Cloud 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.
Low bargaining power of suppliers
– Suppliers of Successfactors Cloud in the sector have low bargaining power. SAP and Cloud Computing in 2012 and Beyond has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Successfactors Cloud to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Successfactors Cloud has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Successfactors Cloud 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
– Successfactors Cloud 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 Successfactors Cloud in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Successfactors Cloud in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Successfactors Cloud 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 Successfactors Cloud 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
– Successfactors Cloud is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Successfactors Cloud 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 SAP and Cloud Computing in 2012 and Beyond HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Successfactors Cloud 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 Robert A. Burgelman, Jean-Bernard Rolland 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.
Diverse revenue streams
– Successfactors Cloud is present in almost all the verticals within the industry. This has provided firm in SAP and Cloud Computing in 2012 and Beyond 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.
Weaknesses SAP and Cloud Computing in 2012 and Beyond | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SAP and Cloud Computing in 2012 and Beyond are -
High operating costs
– Compare to the competitors, firm in the HBR case study SAP and Cloud Computing in 2012 and Beyond 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 Successfactors Cloud 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Successfactors Cloud 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert A. Burgelman, Jean-Bernard Rolland suggests that, Successfactors Cloud 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.
No frontier risks strategy
– After analyzing the HBR case study SAP and Cloud Computing in 2012 and Beyond, 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.
High cash cycle compare to competitors
Successfactors Cloud 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.
Increasing silos among functional specialists
– The organizational structure of Successfactors Cloud is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Successfactors Cloud needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Successfactors Cloud to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Successfactors Cloud 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study SAP and Cloud Computing in 2012 and Beyond, in the dynamic environment Successfactors Cloud has struggled to respond to the nimble upstart competition. Successfactors Cloud has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Successfactors Cloud 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the SAP and Cloud Computing in 2012 and Beyond HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Successfactors Cloud has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Successfactors Cloud, firm in the HBR case study SAP and Cloud Computing in 2012 and Beyond needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities SAP and Cloud Computing in 2012 and Beyond | 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 SAP and Cloud Computing in 2012 and Beyond are -
Creating value in data economy
– The success of analytics program of Successfactors Cloud has opened avenues for new revenue streams for the organization in the industry. This can help Successfactors Cloud to build a more holistic ecosystem as suggested in the SAP and Cloud Computing in 2012 and Beyond case study. Successfactors Cloud can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Successfactors Cloud can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Successfactors Cloud 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Successfactors Cloud can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Successfactors Cloud 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.
Buying journey improvements
– Successfactors Cloud can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. SAP and Cloud Computing in 2012 and Beyond 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.
Leveraging digital technologies
– Successfactors Cloud 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Successfactors Cloud is facing challenges because of the dominance of functional experts in the organization. SAP and Cloud Computing in 2012 and Beyond 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.
Developing new processes and practices
– Successfactors Cloud 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.
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. Successfactors Cloud can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Successfactors Cloud 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 SAP and Cloud Computing in 2012 and Beyond - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Successfactors Cloud 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, Successfactors Cloud 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, SAP and Cloud Computing in 2012 and Beyond, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Successfactors Cloud can use these opportunities to build new business models that can help the communities that Successfactors Cloud operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats SAP and Cloud Computing in 2012 and Beyond External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SAP and Cloud Computing in 2012 and Beyond are -
Shortening product life cycle
– it is one of the major threat that Successfactors Cloud is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Successfactors Cloud 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. Successfactors Cloud can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 wage structure of Successfactors Cloud
– 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 Successfactors Cloud.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Successfactors Cloud with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Successfactors Cloud can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Successfactors Cloud 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 SAP and Cloud Computing in 2012 and Beyond .
High dependence on third party suppliers
– Successfactors Cloud 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.
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 Successfactors Cloud business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Successfactors Cloud 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.
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 Successfactors Cloud.
Technology acceleration in Forth Industrial Revolution
– Successfactors Cloud has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Successfactors Cloud 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.
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 SAP and Cloud Computing in 2012 and Beyond 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 SAP and Cloud Computing in 2012 and Beyond 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 SAP and Cloud Computing in 2012 and Beyond 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 SAP and Cloud Computing in 2012 and Beyond 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 SAP and Cloud Computing in 2012 and Beyond 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 Successfactors Cloud needs to make to build a sustainable competitive advantage.