RevenueWorks tells the story of Mike Sutherland and how he grew the search fund company he acquired from $5 million to over $150 million in revenue. After growing the company with debt and returning dividends to investors through leveraged recapitalizations with private equity investors, Sutherland had to decide the best course to gain liquidity for his existing investors who were eager to see a return on their investment. He had to decide whether to sell the company to a strategic acquirer (at a lower valuation), take on another private equity investor, or IPO the company in the public markets.
Swot Analysis of "RevenueWorks" written by Jim Ellis, Jessica Morgan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Revenueworks Sutherland facing as an external strategic factors. Some of the topics covered in RevenueWorks case study are - Strategic Management Strategies, IPO, IT and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the RevenueWorks casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, geopolitical disruptions, central banks are concerned over increasing inflation,
increasing energy prices, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in RevenueWorks case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Revenueworks Sutherland, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Revenueworks Sutherland 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 RevenueWorks can be done for the following purposes –
1. Strategic planning using facts provided in RevenueWorks case study
2. Improving business portfolio management of Revenueworks Sutherland
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 Revenueworks Sutherland
Strengths RevenueWorks | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Revenueworks Sutherland in RevenueWorks Harvard Business Review case study are -
Organizational Resilience of Revenueworks Sutherland
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Revenueworks Sutherland does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Leadership & Managing People field
– Revenueworks Sutherland 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 Revenueworks Sutherland in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Revenueworks Sutherland is one of the most innovative firm in sector. Manager in RevenueWorks Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Revenueworks Sutherland 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 RevenueWorks HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Revenueworks Sutherland 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.
Learning organization
- Revenueworks Sutherland 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 Revenueworks Sutherland is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in RevenueWorks Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Revenueworks Sutherland in the sector have low bargaining power. RevenueWorks has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Revenueworks Sutherland to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Revenueworks Sutherland 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 RevenueWorks - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the RevenueWorks 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.
Superior customer experience
– The customer experience strategy of Revenueworks Sutherland in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– RevenueWorks firm has clearly differentiated products in the market place. This has enabled Revenueworks Sutherland to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Revenueworks Sutherland to invest into research and development (R&D) and innovation.
Training and development
– Revenueworks Sutherland has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in RevenueWorks 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.
Weaknesses RevenueWorks | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of RevenueWorks are -
High cash cycle compare to competitors
Revenueworks Sutherland 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 star products
– The top 2 products and services of the firm as mentioned in the RevenueWorks 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 Revenueworks Sutherland has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Revenueworks Sutherland 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. Revenueworks Sutherland 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 bargaining power of channel partners
– Because of the regulatory requirements, Jim Ellis, Jessica Morgan suggests that, Revenueworks Sutherland is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Revenueworks Sutherland products
– To increase the profitability and margins on the products, Revenueworks Sutherland needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Revenueworks Sutherland 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 RevenueWorks 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 RevenueWorks can leverage the sales team experience to cultivate customer relationships as Revenueworks Sutherland is planning to shift buying processes online.
Products dominated business model
– Even though Revenueworks Sutherland 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 - RevenueWorks should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Revenueworks Sutherland is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Revenueworks Sutherland needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Revenueworks Sutherland to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study RevenueWorks, 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.
Skills based hiring
– The stress on hiring functional specialists at Revenueworks Sutherland 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.
Opportunities RevenueWorks | 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 RevenueWorks are -
Better consumer reach
– The expansion of the 5G network will help Revenueworks Sutherland to increase its market reach. Revenueworks Sutherland 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. Revenueworks Sutherland 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. Revenueworks Sutherland 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Revenueworks Sutherland 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 Revenueworks Sutherland to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Revenueworks Sutherland 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Revenueworks Sutherland 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.
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 Revenueworks Sutherland 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.
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. Revenueworks Sutherland can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Revenueworks Sutherland 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, Revenueworks Sutherland is facing challenges because of the dominance of functional experts in the organization. RevenueWorks 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.
Creating value in data economy
– The success of analytics program of Revenueworks Sutherland has opened avenues for new revenue streams for the organization in the industry. This can help Revenueworks Sutherland to build a more holistic ecosystem as suggested in the RevenueWorks case study. Revenueworks Sutherland can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Revenueworks Sutherland 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.
Manufacturing automation
– Revenueworks Sutherland 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.
Building a culture of innovation
– managers at Revenueworks Sutherland 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 RevenueWorks External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study RevenueWorks are -
High dependence on third party suppliers
– Revenueworks Sutherland 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.
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 Revenueworks Sutherland in the Leadership & Managing People sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study RevenueWorks, Revenueworks Sutherland 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 .
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 Revenueworks Sutherland business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Revenueworks Sutherland
– 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 Revenueworks Sutherland.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Revenueworks Sutherland 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 RevenueWorks .
Regulatory challenges
– Revenueworks Sutherland 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.
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. Revenueworks Sutherland can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Revenueworks Sutherland has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Revenueworks Sutherland 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Revenueworks Sutherland 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.
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.
Consumer confidence and its impact on Revenueworks Sutherland 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 Revenueworks Sutherland with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of RevenueWorks 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 RevenueWorks 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 RevenueWorks 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 RevenueWorks 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 RevenueWorks 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 Revenueworks Sutherland needs to make to build a sustainable competitive advantage.