SurveyMonkey in 2014 - Strategic Management - Assignment Example

The Case of SurveyMonkey in Table of Contents 0 Summary of the Case……………………………………………………………………….42.0 Should SurveyMonkey acquire an enterprise solution or built it in-house…………………7 2.1 The pros and cons of an enterprise solution………………………………………...7 2.2 Pros and cons of a built in-house strategy…………………………………………..8 3.0 Why can’t SurveyMonkey accelerate the pace of growth and implications for the future....9 3.1 Implications………………………………………………………………………...10 4.0 The risks of a platform vs. a vertical strategy………………………………………………11 5.0 Greatest opportunities/challenges for SurveyMonkey in 2014 and 2015…………………..12 6.0 References………………………………………………………………………………….15 Executive Summary Entrepreneurship denotes identifying an idea and developing it into something tangible that can generate profit. Ryan Finley identified a gap in the marketing research industry and expanded his idea into a business. However, for a company to grow there is a need to invest more capital. Ryan Finley looked for partners who can help grow the Company, but eventually sold SurveyMonkey to Spectrum and Bain. The marketing research survey industry generates approximately $ 39billion annually. With proper planning, SurveyMonkey can gain a substantive share of the marketing research industry. While there are firms in the industry that enjoy economies of scale, a company such as SurveyMonkey can develop solutions to improve their performance in the industry. On the same note, acquiring an enterprise solution presents room for expansion compared to a built in-house solution. However, as a drawback for a company such as SurveyMonkey, an enterprise solution is resource intensive. In terms of accelerating pace of growth, SurveyMonkey still needs time to study the market and avoid taking risks that can harm its growth. Conversely, a platform strategy will be suitable for expansion, however; it involves more risk taking compared to a vertical strategy. As the SurveyMonkey looks forward to expanding, it should take advantage of the existing opportunities and minimize or avoid taking unnecessary risks in the marketing research industry. 1.0 A summary of the case SurveyMonkey in 2014 Entrepreneurship involves identifying an idea or an opportunity that can enable an individual or a business entity to succeed. This is the case for Ryan Finley, who identified a gap in market research study and came up with an idea that created SurveyMonkey. This is a software tool that enabled Finley to collect data more efficiently and the reception from end users was encouraging. As a result of the encouraging feedback, Finley turned this private venture into a business that could generate profit. However, expanding a business entity require more resources and small businesses have limited capital compared to larger businesses. Accordingly, such small businesses are often left with no option, but to look for partners that can add more capital to the business. Looking for partnership sometimes means relinquishing ownership in the event that the prospective investor wants to buy the entire business. This is how Spectrum and Bain ended up buying out SurveyMonkey from the original owner in 2009. For purposes of expanding a business, investors need to consider a number of factors. An example in this regard involves developing a proper understanding of the business. As such, an investor needs to rely on experienced professionals in marketing research to make wise decisions. After Finley had sold SurveyMonkey to Spectrum and Bain, they had to look for a person with vast experience in handling a unique customer-oriented business. The person they choose for this job was former CEO of Ancesty.com, Mr. David Goldberg (Rosenthal, et al. 2004). Having an experienced professional in a new business is important when developing plans to take the business to a new level. This involves looking at the immediate priorities to help the business to remain afloat. For example, the priorities established by Goldberg when he joined SurveyMonkey included relocating the company, establishing a management team and expanding customer base beyond the United States boarders. Improvement in the SurveyMonkey’s technology was also necessary for the intended expansion growth. Rebuilding SurveyMonkey as an established business entity required additional personnel to help with expansion of the international audience. In order to attract more international audience, it was necessary to make the services provided by SurveyMarket user-friendly. For example, a plan to localize the Company’s website to support language and currency of international users was well thought. However, such an endeavor may cause a strain on the available resources and derail expansion plans. Alternatively, additional acquisitions can help to minimize the strain on resources and improve SurveyMonkey capabilities. For example, the Company acquired Precision polling to minimize strain on the technical resources. Strategy is a key factor in improving the prospect of a business entity. For instance, SurveyMonkey introduced a tiered pricing structure to establish its premium services. However, while putting in place the premium services, it is also important to consider customers who cannot afford the premium services like the monthly subscribers. In the modern business environment, competition is stiff, and SurveyMonkey is not an exemption. This is because there are also other companies in the survey industry competing for the same market share (Rosenthal et al. 2004). The industry generates approximately $39 billion annually, and strategic management is important for SurveyMonkey to remain relevant. In this industry, there are firms that enjoy economies of scale as full-services providers while others operate as mid-level providers. Also as a strategy, a company can learn to diversify by creating other solutions such as DIY (Do-It-Yourself). In addition, SurveyMonkey had a built-in supply that it could use in enhancing its existing solutions. In order to realize further growth, SurveyMonkey acquired Wufoo and three Market Tools products. Other than acquiring new companies, SurveyMonkey also added other personnel to help the Company in its next phase of growth. Growing to the next phase meant that MonkeySurvey had to shift from a tool to platform. Evolving from a platform solution would allow customers to integrate SurveyMonkey capabilities to use in their software products (Rosenthal et al. 2004). Further, expansion also meant opening up their platform to develop technology that can be used by developers gathering data on the internet, apps or offline anywhere around the globe. To achieve the goal, SurveyMonkey launched Application Programming Interface (API) and looking for better ways to interact with customers on enterprise level. Improving the quality of data was another area that SurveyMonkey had to look at since most of the firm’s resources had been channeled to acquisitions, re-engineering and development of enterprise products. Quality data in this sense meant improving the quality of questions and presenting the Company as a professional service entity. However, the many efforts that SurveyMonkey has taken is still not enough to serve customers from over 190 countries. As a result, SurveyMonkey should focus on important markets with large organic demand. In addition, the pricing model should encourage viral activity necessary to enhance penetration and establish a widespread user base. Growth also requires financial backup to provide liquidity for both workers and investors. As the Company looks ahead for future growth, SurveyMonkey can exploit its extensive resources to implement significant growth initiatives. Such initiatives include international expansion, developing enterprise solution, quality initiatives and API’s. While there are challenges with such initiatives, SurveyMonkey needs to take advantage of the opportunities provided by the initiatives it has implemented. Taking advantage of the opportunities provided by the initiatives the Company has implemented is necessary to realize a long-term growth. Conversely, a major challenge for the Company would also be how to execute the platform approach in a crowded industry. In essence, moving forward requires SurveyMonkey to prioritize avenues for growth and strategically position itself to achieve its full potential (Rosenthal et al. 2004). 2.0 Should SurveyMonkey acquire an enterprise solution or built it in-house Acquiring an enterprise solution for a Company such as SurveyMonkey is needed because of its growth and expansion. On the other hand, an in-house built solution is not viable for the firm because of the limited resources to expand the business. Accordingly, SurveyMonkey can take advantage of already existing enterprise solutions that have SurveyMonkey users. The business environment is dynamic and acquiring an enterprise solution than built it in-house improves the chances of SurveyMonkey to compete head to head with other established firms (Barney, 2001). The fact that SurveyMonkey experienced pushback and increased demand for its product features meant that it was operating at the enterprise level. Consequently, it is important for the company to rethink its approach. A built it in-house solution means that SurveyMonkey will rely on its customers as their sales force. However, as a Company that wants to compete at the same level with other established players, an enterprise solution is ideal compared to an in-house built solution (Barney, 2001). 2.1The pros and cons of an enterprise solution The advantages of an enterprise solution are that it provides SurveyMonkey with an opportunity to expand and operate at the same level with the big players in the industry. An enterprise solution will also allow SurveyMonkey to enjoy economies of scale by operating in large scale. As a Company that intends to expand internationally, using organizations that have a license to an enterprise survey solution is cost effective. An enterprise solution if selected wisely has the potential to accommodate an increase of customers to SurveyMonkey services. Rigidity in technological changes will also be minimized with an enterprise solution. Further, an enterprise solution will enable SurveyMonkey to rely on a wide pool of sales force to improve its performance in a competitive market (Simons, 2010). However, the disadvantage of an enterprise solution for SurveyMonkey is that it could alienate individual customers. In addition, the quality of services may be compromised as a result of relying on other organizations that have SurveyMonkey users. It is also difficult to use this strategy to make true enterprise products self-service and affordable to customers (Simons, 2010). 2.2 Pros and cons of a built in-house strategy A built in-house strategy is beneficial for SurveyMonkey when developing a customized solution. In addition, an in-house strategy will provide SurveyMonkey with a differentiation strategy. An in-house strategy is also cost effective because it allows the Company to rely on its customers as the sales force. In addition, an in-house strategy will allow SurveyMonkey to study the market before expanding to compete at the same level as established companies (Simons, 2010). Using an in-house strategy will also ensure that the quality of services provided by SurveyMonkey is not compromised. Further, with an in-house strategy, it will be easier for SurveyMonkey to review its services frequently and make changes according to their customer’s demands. Conversely, an in-house strategy is disadvantageous for SurveyMonkey because it intends to expand its business internationally. An in-house strategy is only ideal for small business with few customers. This strategy also strains the available resources because; there is no flexibility in terms of outsourcing services or meeting an increased customer demands (Simons, 2010). 3.0 Why can’t SurveyMonkey accelerate the pace of growth and implications for the future? SurveyMonkey cannot accelerate the pace of its growth because it has first to understand the dynamics of the industry. Second, the Company has to re-engineer itself in terms of improving its services and this require time to implement. In addition, expansion requires more resources and human capital to accelerate growth. However, as a small company, SurveyMonkey needs to develop gradually and avoid taking risks that can derail the pace of growth (Prahalad & Hamel, 2003). In this industry, there are already established firms that enjoy economies of scale. As such, accelerating the pace of growth for SurveyMonkey can collapse the business due to limited resources. On the other hand, SurveyMonkey cannot accelerate the pace of growth because it needs to lay a new ground for its business prospects. For instance, it is necessary to localize the site to accommodate international customers. Previously, the Company only served customers from the United States, but because of its intended expansion internationally, there is need to upgrade the payment platform. This initiative is necessary to streamline the services provided by SurveyMonkey and make it accessible to international users (Prahalad & Hamel, 2003). There is also the need to boost the SurveyMonkey’s capabilities without straining its technical resources. In this regard, time is needed to look for mergers or acquisitions that can help to improve the Company’s capabilities to penetrate the marketing research survey industry. Time taken to identify the targeted market is also a contributory factor in the delays to accelerate the pace of growth. Initially, the company’s paying user base consisted of monthly subscribers, however; SurveyMonkey wants to expand to annual subscribers. Attracting annual subscribers means that the Company should venture into a market with higher penetration. Identifying markets with higher penetration also require time (Reeves & Deimler, 2011). Rebuilding the internal pricing system to accommodate different pricing tiers also affects the pace of growth for SurveyMonkey. On another note, stiff competition from other companies also affects SurveyMonkey’s pace of growth. This is because SurveyMonkey has to establish itself in the industry before competing at the same level with the big players. In addition, SurveyMonkey cannot accelerate the pace of growth because time is needed to identify high-quality survey respondents (Reeves & Deimler, 2011). 3.1 Implications A well-planned strategy by SurveyMonkey will help the Company to place itself better in the marketing research industry. This is because, the Company needs to lay down proper plans to ensure that the services it offers are relevant and can generate profits for the Company now and in the future (Markides, 2000). Having a properly planned strategy for SurveyMonkey will ensure that it executes a change management process that is efficient and commensurate with the current and future needs in the marketing research industry. Acquisitions play an important role in improving a company’s growth and taking time to identify the right company is appropriate for moving SurveyMonkey in the right direction. Further, time taken to identify the right market for SurveyMonkey products will help the Company to generate profits necessary for growth and expansion in the future. On another note, taking time to get the right people to manage the Company brings a wealth of experience necessary to help SurveyMonkey gain a competitive edge in the industry (Markides, 2000). Taking time to build a team of experienced personnel at SurveyMonkey will ensure the Company grows the number of its audience both locally and internationally. As a strategy, the time taken to develop proper survey questions will help to improve the effectiveness of SurveyMonkey’s Question Bank for customer satisfaction in the future. Since there are many players in the marketing research industry, a new company requires time to develop a strategy that will draw more customers to its services in the future. Taking time to understand how the business operates will ensure SurveyMonkey invest in the right technologies. As a result, the Company will be in a position to trump rivals because of taking time to develop an operating system that will leverage their competencies (Collins & Rukstad, 2000). A gradual development of Survey Monkey’s products and services will ensure the Company build its image, improve customer loyalty and expand its services in the marketing research industry. Any business venture has challenges and opportunities that require time to identify the areas that the business can prosper and areas that need to be avoided. Accordingly, the time taken by SurveyMonkey to identify the opportunities in the industry and avoid taking unnecessary risks will help the Company to sustain its growth agenda (Collins & Rukstad, 2000). 4.0 The risks of a platform vs. a vertical strategy A platform strategy involves a firm extending its services to other companies in the same industry to fasts track its growth. On the other hand, a vertical strategy involves the company managing every aspect of services or products without relying on a third party. In this sense, a platform strategy involves more risks taking compared to a vertical strategy. In a platform strategy, for example, a company can diversify its serves by integrating their capabilities with that of clients. As such, a company using a platform strategy may not realize its full potential by allowing others to access their technology. In addition, a platform strategy is capital intensive because, a company needs to move upmarket to tackle enterprise-level customer needs, and look for partnerships to establish a competitive edge and growth (Barney & Clifford, 2010). On the other hand, a vertical strategy allows a company to develop at a pace that is ideal for the company. Further, there is minimal pressure compared to a platform strategy that requires a company to expand its resource base. It is also easier to develop customized services through a vertical strategy since everything is done in-house. In a vertical strategy, the company can easily develop unique products because sharing of technology is minimal. Further, operations in a company using a vertical strategy are easier compared to employing a platform strategy. This is because, in a vertical strategy, everything is done within the organization and partnering or dealings with other entities are limited (Barney & Clifford, 2010). 5.0 Greatest opportunities/challenges for SurveyMonkey in 2014 and 2015 As an industry that generates $39billion annually, SurveyMonkey needs to take advantage of its unique services to improve its market share in the industry. In addition, other than serving individual customers, SurveyMonkey needs to expand its services and operate as an entity providing marketing research for other big organizations to improve its profits. The Company also needs to introduce more products to increase its profit making capabilities. Marketing research is an area that still has opportunities for expansion around the world. As a result, SurveyMonkey should take advantage of such an opportunity to expand itself. For example, the Company can expand to untapped markets around the world where the demand for marketing research is growing. In order to enjoy economies of scale, SurveyMonkey needs to merge or acquire companies providing marketing research services around the world. In addition, merging or acquiring other companies in the same industry will help to accelerate the pace of growth for SurveyMonkey (Porter, 2008). The company through its experienced and skilled professional can improve the quality and uniqueness of SurveyMonkey products. This can help in the future in terms of providing SurveyMonkey with a differentiation strategy over competitors. The company can also capitalize on its good performance in the industry since inception to solicit for more funds to expand its business. In addition, the Company can use its resources to execute a number of growth initiatives. For instance, the companies resources can be used to accelerate its international expansion improve the enterprise solution, quality initiatives, and the APIs (Kim & Maouborgne, 2004). However, while there are opportunities that SurveyMonkey can grab moving forward, there are also challenges. For instance, the competition in the marketing research industry is stiff and requires SurveyMonket to improve its game. In order to improve and compete at the same level with other big players in the industry, the Company will need to invest more capital. Investing more capital may prove difficult because the Company has already committed finances to its expansion strategy (Porter, 2008). In addition, the Company needs to get the appropriate investors willing to invest in SurveyMonkey on a long-term basis. Building a solid user base is also a challenge in terms of the tier prices offered by the Company. For instance, while the Company prefers annual subscribers, leaving out the monthly subscribers would mean losing a group of customers that could add to the growth of the Company. A challenge also exists in international expansion in terms of identifying the right markets that can propel the growth of SurveyMonkey. The Company also faces a challenge in terms of improving its R&D capabilities. Investing in R&D capabilities is important because, it will help the Company improve the services that they provide to customers (Kim & Maouborgne, 2004). On the other hand, while the company considers introducing an enterprise solution, a challenge arises on how they can satisfy the needs of individual customers. Introducing other solutions to compete at the same level with other companies in the industry will require SurveyMonkey to increase the number of its sales force. Further, as more players continue to join the industry, competition will increase, and this requires SurveyMonkey to develop strategies that will help the Company to remain at the helm. As the Company moves to the future, prioritizing avenues with potential for growth will be critical to realizing success in the marketing research industry (Porter, 2008). 6.0 References Barney, J., 2001. Gaining and sustaining competitive advantage, 2nd edition, New Jersey: Prentice Hall, Barney, J.B., & Clifford, T.G., 2010. Real world strategies for analyzing the value chain, applying the VRIO framework (resource based view), and recognizing core competencies, , Boston, MA: Harvard Business Review Press. Collins, D.J., & Rukstad, M., 2008. Can you say what your strategy is? Boston, MA: Harvard Business School Press, MA. Kim, C., & Maouborgne, R., 2004. Blue ocean strategy, Boston, MA: Harvard Business School Press. Markides, C.C., 2000. All the right moves: A guide to crafting breakthrough strategy, Boston, MA: Harvard Business School Press. Porter, M.E., 2008. The five forces that shape strategy, Boston, MA: Harvard Business School Press. Prahalad, C.K., & Hamel, G., 2003. The core competence of the corporation, Boston, MA: Harvard Business School Press. Reeves, M., & Deimler, M., 2011, Adaptability: The new competitive advantage, Boston, MA: Harvard Business School Press. Rosenthal, S., Burgelman, R., Littlefield, E., & Siegel, R 2004, SurveyMonkey in 2004, Stanford, CA: Stanford Business School of Graduate, Simons, R., 2010, Stress-test your strategy: The 7 questions to ask, Boston, MA: Harvard Business School Press. Read More