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 - – increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing transportation and logistics costs, increasing commodity prices, cloud computing is disrupting traditional business models, wage bills are increasing,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
Successful track record of launching new products
– Successfactors Cloud has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Successfactors Cloud 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– SAP and Cloud Computing in 2012 and Beyond firm has clearly differentiated products in the market place. This has enabled Successfactors Cloud to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Successfactors Cloud to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Successfactors Cloud 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.
Need for greater diversity
– Successfactors Cloud 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.
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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study SAP and Cloud Computing in 2012 and Beyond, is just above the industry average. Successfactors Cloud 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.
Products dominated business model
– Even though Successfactors Cloud 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 - SAP and Cloud Computing in 2012 and Beyond should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
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 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.
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 -
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 Successfactors Cloud 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.
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.
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.
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.
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.
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.
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.
Loyalty marketing
– Successfactors Cloud 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.
Learning at scale
– Online learning technologies has now opened space for Successfactors Cloud 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.
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.
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.
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 Successfactors Cloud in the consumer business. Now Successfactors Cloud can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
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.
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.
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.
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.
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 .
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.
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.
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.
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.
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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Successfactors Cloud 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.
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.