The Eyewitness Surveillance case tells the story of Rush Arnold and RT McCloy, friends who met while studying at Wharton, who raise a search fund under the name Channelstone Partners. In the fall of 2010, after having spent two-thirds of their search fund capital and reviewed over 200 companies, they came across Eyewitness Surveillance, a company specializing in the use of video technology to protect the assets of car dealerships. Eyewitness' cofounder, Vince Redland, was interested in selling the company to pursue other interests and Arnold and McCloy found the industry, company, and deal all compelling. Over the course of the next two months, they engaged in a due diligence process which further validated their interest in the company, but also raised several red flags. Among the issues highlighted in due diligence included widespread employee disgruntlement, particularly with Vince (who was also the top sales person), a reluctance to share detailed financial information, and an 11th hour disagreement about a contract clause stipulating that the purchase price would go down if monthly revenues declined after the close. Despite having conducted a thorough and in-depth due diligence process, Arnold and McCloy were at the end of their search capital and facing a deal that was on the brink. They were now faced with the question of whether or not they wanted to charge ahead, despite the red flags, or walk away, knowing that this could potentially be the end of the road.
Swot Analysis of "Eyewitness Surveillance" written by David Dodson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eyewitness Mccloy facing as an external strategic factors. Some of the topics covered in Eyewitness Surveillance case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Eyewitness Surveillance casestudy better are - – challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%,
increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Eyewitness Surveillance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Eyewitness Surveillance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eyewitness Mccloy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eyewitness Mccloy 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 Eyewitness Surveillance can be done for the following purposes –
1. Strategic planning using facts provided in Eyewitness Surveillance case study
2. Improving business portfolio management of Eyewitness Mccloy
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 Eyewitness Mccloy
Strengths Eyewitness Surveillance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eyewitness Mccloy in Eyewitness Surveillance Harvard Business Review case study are -
Effective Research and Development (R&D)
– Eyewitness Mccloy 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 Eyewitness Surveillance - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Eyewitness Mccloy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eyewitness Mccloy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Eyewitness Surveillance 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 lead change in Leadership & Managing People field
– Eyewitness Mccloy 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 Eyewitness Mccloy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Eyewitness Mccloy in the sector have low bargaining power. Eyewitness Surveillance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eyewitness Mccloy to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Eyewitness Mccloy 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 Eyewitness Mccloy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Eyewitness Surveillance Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Eyewitness Mccloy 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.
Diverse revenue streams
– Eyewitness Mccloy is present in almost all the verticals within the industry. This has provided firm in Eyewitness Surveillance 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.
Training and development
– Eyewitness Mccloy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Eyewitness Surveillance Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Eyewitness Mccloy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Eyewitness Mccloy has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Eyewitness Mccloy is one of the most innovative firm in sector. Manager in Eyewitness Surveillance Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Eyewitness Mccloy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Eyewitness Surveillance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eyewitness Surveillance are -
High cash cycle compare to competitors
Eyewitness Mccloy 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.
Capital Spending Reduction
– Even during the low interest decade, Eyewitness Mccloy 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 bargaining power of channel partners
– Because of the regulatory requirements, David Dodson suggests that, Eyewitness Mccloy 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 Eyewitness Surveillance, in the dynamic environment Eyewitness Mccloy has struggled to respond to the nimble upstart competition. Eyewitness Mccloy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Eyewitness Surveillance, it seems that the employees of Eyewitness Mccloy 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Eyewitness Surveillance 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 Eyewitness Mccloy has relatively successful track record of launching new products.
Need for greater diversity
– Eyewitness Mccloy 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.
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 Eyewitness Mccloy supply chain. Even after few cautionary changes mentioned in the HBR case study - Eyewitness Surveillance, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Eyewitness Mccloy vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Eyewitness Surveillance HBR case study mentions - Eyewitness Mccloy 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Eyewitness Mccloy 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.
Lack of clear differentiation of Eyewitness Mccloy products
– To increase the profitability and margins on the products, Eyewitness Mccloy needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Eyewitness Surveillance | 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 Eyewitness Surveillance are -
Developing new processes and practices
– Eyewitness Mccloy 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.
Creating value in data economy
– The success of analytics program of Eyewitness Mccloy has opened avenues for new revenue streams for the organization in the industry. This can help Eyewitness Mccloy to build a more holistic ecosystem as suggested in the Eyewitness Surveillance case study. Eyewitness Mccloy can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Eyewitness Mccloy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Eyewitness Surveillance 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.
Manufacturing automation
– Eyewitness Mccloy 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.
Using analytics as competitive advantage
– Eyewitness Mccloy 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 Eyewitness Surveillance - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Eyewitness Mccloy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Eyewitness Mccloy 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Eyewitness Mccloy is facing challenges because of the dominance of functional experts in the organization. Eyewitness Surveillance 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Eyewitness Mccloy 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.
Leveraging digital technologies
– Eyewitness Mccloy 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.
Better consumer reach
– The expansion of the 5G network will help Eyewitness Mccloy to increase its market reach. Eyewitness Mccloy 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 Eyewitness Mccloy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Eyewitness Mccloy 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. Eyewitness Mccloy 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.
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 Eyewitness Mccloy 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.
Threats Eyewitness Surveillance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Eyewitness Surveillance are -
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. Eyewitness Mccloy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Eyewitness Mccloy 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.
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 Eyewitness Mccloy in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Eyewitness Mccloy business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Eyewitness Mccloy 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. Eyewitness Mccloy can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Regulatory challenges
– Eyewitness Mccloy 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.
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.
High dependence on third party suppliers
– Eyewitness Mccloy 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.
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. Eyewitness Mccloy 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.
Increasing wage structure of Eyewitness Mccloy
– 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 Eyewitness Mccloy.
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.
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 Eyewitness Mccloy.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eyewitness Mccloy 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 Eyewitness Surveillance .
Weighted SWOT Analysis of Eyewitness Surveillance 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 Eyewitness Surveillance 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 Eyewitness Surveillance 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 Eyewitness Surveillance 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 Eyewitness Surveillance 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 Eyewitness Mccloy needs to make to build a sustainable competitive advantage.