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, increasing household debt because of falling income levels, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
wage bills are increasing, there is backlash against globalization, 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 -
Organizational Resilience of Successfactors Cloud
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Successfactors Cloud does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Learning organization
- Successfactors Cloud 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 Successfactors Cloud is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SAP and Cloud Computing in 2012 and Beyond Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the SAP and Cloud Computing in 2012 and Beyond Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to recruit top talent
– Successfactors Cloud is one of the leading recruiters in the industry. Managers in the SAP and Cloud Computing in 2012 and Beyond are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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 -
Slow to strategic competitive environment developments
– As SAP and Cloud Computing in 2012 and Beyond HBR case study mentions - Successfactors Cloud 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study SAP and Cloud Computing in 2012 and Beyond, it seems that the employees of Successfactors Cloud 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.
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.
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 Successfactors Cloud supply chain. Even after few cautionary changes mentioned in the HBR case study - SAP and Cloud Computing in 2012 and Beyond, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Successfactors Cloud vulnerable to further global disruptions in South East Asia.
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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Successfactors Cloud 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. Successfactors Cloud 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.
Lack of clear differentiation of Successfactors Cloud products
– To increase the profitability and margins on the products, Successfactors Cloud needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Successfactors Cloud is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study SAP and Cloud Computing in 2012 and Beyond can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 -
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Successfactors Cloud 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 Successfactors Cloud to hire the very best people irrespective of their geographical location.
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. Successfactors Cloud 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. Successfactors Cloud 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.
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.
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.
Building a culture of innovation
– managers at Successfactors Cloud 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.
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.
Better consumer reach
– The expansion of the 5G network will help Successfactors Cloud to increase its market reach. Successfactors Cloud 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.
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.
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.
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.
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.
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.
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 .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SAP and Cloud Computing in 2012 and Beyond, Successfactors Cloud 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. Successfactors Cloud 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. Successfactors Cloud needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Regulatory challenges
– Successfactors Cloud 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.
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.
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 Successfactors Cloud in the Leadership & Managing People sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Successfactors Cloud 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.
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.
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.