BUS488

Strategy

TMA 01
July 2016 Presentation

Submitted by:
Yeap Mei Ling
B1371759
INTRODUCTION

Industry

Custom online survey platform industry (a subset of the broader Market Research Industry)

Timeline

2009 2014

Segments

Predominantly B2C, with elements of B2B

Question 1 (a)
The macro-environment analysis for this industry only present 3 factors: Economic, Socio-
Cultural and Technological. No case evidence for Political, Environmental and Legal.

Factors Explanation Citation Opportunity/

Threat
Economic Size of the industry: Page 6 Opportunity
Market research was an industry which rake in para 4
$38 billion annually.

Globalisation:
International customers, despite of language and Page 4 Opportunity
currency barriers, have shown interest in online para 2
surveys.

Demands of large firms:

Big corporations are willing to spend money on Page 7 Opportunity
large market research firms to carry out annual Para 1
employee or customer satisfaction surveys.
Socio- Accessibility & functionality:
Cultural User-friendly survey interface has changed the Page 8 Opportunity
way individuals collect and analyse data. DIY para 4;
online surveys are affordable and accessible to Page 12
any individual, even customers used it for para 3
professional settings

Demand from individual & large firms: Page 9 Opportunity

Growing demand from individual survey Para 3,
creators for high quality survey respondents. 4
Large corporations such as Procter & Gamble,
Tide and Kraft would pay exorbitant fees for
consumer insights data.
Technological Technological Advancement: Page 4 Opportunity
Python programming makes recruitment of para 4
 skilled engineers easier as they prefer to work
with open source technologies due to its
flexibility of integration.

Scalability & Quality:

An industry that relies heavily on technological Page 3 Threat
infrastructure and ongoing reengineering efforts para 5

Software-as-a-Service (SaaS):
A new type of customised solutions to address
the growing customer base of large corporate Page 7 Threat
customers. The solutions cover wide spectrum of para 2
customer experience, tactical surveys and
employees feedback.
Conclusion for Macro-Environment:

Overall, the macro-environment is favourable as of 2014. The dominant factors are Socio-
Cultural and Economic.

The key Opportunities come from Socio-Cultural and Economic where individuals find it
accessible to customise their own surveys using a DIY online survey, even customers used it
for professional settings. International customers have also shown interest in online surveys.

The key Threat comes from Technological factor. The industry needs to stay abreast with
the latest programming software in order to stay relevant.
Question 1 (b)

Porters 5 Forces (Industry Analysis)

1st Force - Threat of new Entrants

Factors Explanation Citation Threat
Level
Scale & A high scale and experience is required. Skilled Exhibit 1 Low
Experience engineers with computer science knowledge are
needed to build the functionality of an online survey
platform and to anticipate large users.
Access to Access to supply is relatively hard as experienced Page 3 Low
Supply or engineers or technologists are preferred to run an para 5;
Distribution entire software infrastructure. No distribution Page 4
Channels channels because users can access survey tools Para 4
directly on the Internet.
Expected Low expected retaliation because most of the basic Page 8 High
Retaliation survey tools are free or rather affordable. Unlikely para 2
for price wars.
Legislation &
Government No case evidence.
Action
Differentiation Low differentiation as there are many consumer- Page 8 High
friendly products for individuals to conduct their para 2
own surveys.
Sub-conclusion:
The threat of new entrants is low.
The dominant factor is scale and experience, where highly skilled IT engineers are needed to
programme a software that can support multiple users locally and globally.
 2nd Force - Threat of Substitutes
Key Substitutes: Syndicated data from full service providers, online video interviews, chat
Factors Explanation Citation Threa
t Level
Price Users seek for customisation feature at affordable Page 8 Low
performance pricing to get better insights which syndicated could not para 3;
ratio provide due to its standardisation. Custom online Exhibit
surveys are typically free for basic users and simplistic 3
to navigate. Full-fledged market research solutions are
extremely expensive and more complex to use.
Extra Large demand for targeted survey respondents data. Page 9 Low
industry Smaller firms may offer differentiated solutions at lower Para 3
effects cost such as online video interviews or chat but the
market for panel respondents remains fragmented due to
quality issues.
Sub-conclusion:
The threat of substitutes is low.
The dominant factor is price performance ratio because syndicated data cannot offer the same
degree of specialisation as a customised survey.

3rd Force Power of Buyers

Key Categories of Buyers: B2C (Users who want to collect data, survey respondents,
individuals within organisations); B2B (corporations)
Factors Explanation Citation Threat
Level
Concentration Low concentration because there are more buyers Page 7 Low
of buyers, (large corporate customers and growing customer Para 2
relative to base) than suppliers (market research providers).
suppliers
Switching cost Low switching cost. No obligation to bind Assumption High
individual users to pay switching fee. For B2B
users, SaaS functions as an on-demand service, so
buyers will only pay when they need the service.
 No upfront payment for software installation or
maintenance.
Buyer Unlikely for backward integration as buyers may Assumption Low
competition not possess the technical know-how or have
threat access to technical resources.
Sub-conclusion:
The power of buyers is high.
The dominant factor is low switching cost because buyers can easily switch between survey
providers especially if they are using the basic free features. Also, SaaS is an on-demand
service which allow buyers to switch easily with no lock-in cost.

4th Force Power of Suppliers

Key Categories of Suppliers: Skilled engineers, third-party providers (language
translators, payment platforms), third party developers
Factors Explanation Citation Threat
Level
Concentration No case evidence.
of suppliers,
relative to
buyers
Switching cost High switching cost. Certain sunk cost may be Assumption High
incurred for software infrastructure, licensing
and patents.
Supplier Low forward integration due to its technical Assumption Low
competition intensive resources.
threat
Sub-conclusion:

The power of suppliers is high.

The dominant factor is switching cost. Custom online survey tools or platforms are
intangible products; hence suppliers for this industry are specialised labour (IT engineers).
 5th Force Competitive Rivalry
Key Competitors: Mid-level Providers (Qualtrics, ClickTools, Vovici), Consumers
(SurveyGizmo, Eval&Go, FluidSurveys, SoGo Survey, Google Forms), Enterprise Feedback
Management vendors (Allegiance, Medallia, Confirmit, Questback)

Factors Explanation Citation Threat

Level
Competitor 3 segments are clearly delineated in the case: i) Page 7 & 8 Moderate
balance mid-level providers who target enterprise and
academic institutions, ii) EFM vendors who
provide SaaS services iii) custom consumer
providers who target individuals and students
Industry No case evidence.
growth rate
Fixed cost Moderate to high fixed cost. Could be Assumption Moderate
attributed to sunk cost for software
infrastructure or licensing.
Exit barriers Moderate exit barrier due to sunk cost to build Assumption Moderate
software infrastructure.
Differentiation Low product differentiation. Market may be Page 7 para High
fragmented but many options for free, user- 2; Page 8
friendly custom surveys. para 2
Sub-conclusion:

Competitive rivalry is high.

The dominant factor is low product differentiation. Most basic online survey templates are
free to use by any individuals.
Porters 5 Forces Conclusion

Overall, the industry is unattractive.

The dominant forces are high power of buyers and competitive rivalry. Users can easily
switch to any custom online survey provider and competition is intense due to low product
differentiation among the free basic survey templates.
Question 2 (a)

Bundled Resources Citation Competencies Citation Strategic Capabilities

Reputation: Page 12 Adopt a cost-effective marketing because Page 5 SC #1: The ability to be the
Market leader in the DIY survey space para 3 the tool markets itself para 4 market leader in the custom
online survey arena by
Human resources: Page 3 Garner 12 million subscribers in early Page 11 leveraging on its highly
CEO, Goldberg has valuable and para 3; 2012 and 300,000 were paying subscribers para 4 skilled team, coupled with
extensive network. financial strength and
Acquire high potential companies such as Page 5 & synergies from acquisition.
Financials: Page 11 Precision Polling in 2010, Wufoo and 11
Targeted revenue of $113 million in para 5; MarketTools in 2011
2012 and raise $800m financing in Page 14,
2013 para 2
Management & Leadership: Page 11 Develop Audience product which make the Page 9 SC #2: The ability to develop
Goldbergs strategic vision for the para 5 process of accessing survey respondents para 4 Audience product where
next phase of growth self-service survey creators can access to a
large, high quality panel of
Human Resources: Page 10 Ensure respondents were representative of Page 10 survey respondents.
Built-in satellite engineering and sales para 1 & the U.S. population para 2
team, built-in supply of respondents 2
Technology: Page 6 Upgrade payment platform to integrate Page 6 SC #3: The ability to penetrate
Proprietary system in house para 2 foreign currencies memberships and para 2 its international reach in 190
rebuild the internal billing system countries by localising
Human resources: Page 6 Page 13 SurveyMonkey website to
Engineers para 2 Translate SurveyMonkey into 16 para 3 reflect the respective
languages and supported 39 different countries language and
Physical: Page 13 currencies and provide support services for Page 13 currency.
Customer support office in Lisbon, para 3 10 of the 16 translated languages para 2
Portugal
Human Resources: Page 9 Partner with MailChimp, Eventbrite, Page 12 SC #4:
Survey research team para 2 Zapier, HootSuite, GroScocial and para 1
ZenDesk through API The ability to expand its reach
Technology: through integration with other
Developer portal & Application Page 12 Partner with Harvard Graduate School of Page 13 software products and
Programming Interface (API) for para 1 Education to determine the best practice para 1; maintain high quality for
developers to integrate SuveyMonkey questions for most widely used survey Exhibit 4; widely used survey templates
into their software template (Parent Surveys for K-12 Exhibit 6 provided by its Question
Schools) Bank.
Page 9
Determine the best practice questions and para 2;
provide survey templates via Question
Bank (exhibit 4)
Question 2 (b)
Strategic Capabilities VRIO Test Results
Organisational
Valuable Rare Inimitable Support

SC #1: Valuable to users High tacit knowledge
because they use among top management

The ability to be the market SurveyMonkey to with commendable
Rare because the
leader in the custom online make decision with credentials in Acquisitions enhance Sustained
tool markets itself
survey arena by leveraging data (Page 3 para 4). technology, engineering, survey functionality Competitive
without any
on its highly skilled team, Valuable to garner 12 and merger & and increase user base Advantage
marketing efforts
coupled with financial million subscribers in acquisition, on top of (page 5 & 11)
(page para 1).
strength and synergies from early 2012 and connection to private
acquisition. 300,000 were paying equity firms (Exhibit 1)
subscribers (page 11)
 Strategic Capabilities VRIO Test Results
Organisational
Valuable Rare Inimitable Support


Rare because panel
SurveyMonkey had a
SC #2: respondent segment
built-in supply of
remains fragmented
Large high quality respondents, built-in
The ability to develop due to poor data
panel of respondents satellite engineering Sustained
Audience product where Valuable. Audience quality and expensive
cannot be replicated team, sales team and Competitive
survey creators can access made multi-million- solutions which were
overnight as it takes survey research team Advantage
to a large, high quality dollar revenue (page not even integrated
time to build (page 9 & 10).
panel of survey 10 para 2). with the survey tool
database.
respondents. itself (Page 9 para 3)
 Strategic Capabilities VRIO Test Results
Organisational
Valuable Rare Inimitable
Support

SC #3: Not rare because full

service providers
The ability to penetrate its Valuable for the (Accenture, McKinsey,
international reach in 190 company because 25- WPP) also have global
Competitive
countries by localising 30% of the users were presence in different
parity
SurveyMonkey website to international (page 4 geographies (page 6 para 5)
reflect the respective para 2) and 45% of and mid-level provider,
countries language and them premium user Qualtrics customer base
currency. base (page 11 para 5) spanned across 97 countries
(page 7 para 4)
Strategic Capabilities VRIO Test Results
Valuable Rare Inimitable Organisational Support

Valuable as
SC #4:
SurveyMonkey gains user Partner with Harvard
base via MailChimp, The case did not Reputation as a market Graduate School of
The ability to expand its
Eventbrite, Zapier, mention any other leader in the DIY survey Education to determine
reach through
integration with other
HootSuite, GroScocial competitor who are space gave the best practice Sustained
software products and
and ZenDesk (page 12 collaborating with SurveyMonkey the questions for most Competitive
maintain high quality
para 1). Valuable for the a host of advantage to collaborate widely used survey Advantage
user because Parent companies like and partner with various template (Parent
for widely used survey
Surveys for K-12 Schools what companies and Surveys for K-12
templates provided by
was the most widely used SurveyMonkey did institutions (page 12 para Schools) (Page 12 &
its Question Bank.
template (page 12 para with API. 3). Hence, hard to copy. 13)
3).
Conclusion of VRIO test:
SurveyMonkeys key strength lie in its ability to:

(i) Recruit top management with commendable credentials, experience and well-versed in technology, engineering, merger and
acquisition, coupled with connection to private equity firms
(ii) Diversify and increase user base with the integration of SurveyMonkey platform with other developers and acquisitions
(iii) Leverage on its global presence in 190 countries who made up 2530% of the user base and 45% of them were premium consumers
(page 4 para 2).
(iv) Facilitate users with effective survey design via Question Bank and allow survey creators to access to a large panel of high quality
respondents via Audience (page 9 & 10).
Question 2 (c)

From SC #1 and emphasis from the case, half of the 300,000 paying subscribers consist of
monthly subscribers, whom are mostly students. The key weakness is that these subscribers
pose a high risk of membership cancellation once they are done with school projects (page 5
para 4)

From SC #3 and reference from the case, SurveyMonkey invested heavily into infrastructure
such as payment processing and language support for its international users. The key
weakness is such fixed infrastructure cannot cater to the varying countries websites as a one-
size-fit-all solution (page 13 para 3). This may signal a high opportunity cost due to its
resource intensive nature which may jeopardise cash flow and impact revenue.

The case also sets out details regarding its uncertainty over the receptiveness of
SurveyMonkey enterprise solution, which was differentiated as a self-service enterprise
product. This may indicate a possible weakness as enterprise users are conditioned to expect
the same advanced functionality as a customised SaaS solution from full and mid-level
services (page 12 para 2).

Another possible weakness is the lack of a salesforce to promote the enterprise solution if
SurveyMonkey wants to have a level playing field with the rest of the enterprise competitors
(page 12 para 3).
Question 3 (a)
Strength Weakness

S#1: Recruit top management with W#1: High churn rate of monthly subscribers
commendable credentials, experience and who are mostly students which make up 50%
well-versed in technology, engineering, of the total paying subscribers
merger and acquisition, coupled with
connection to private equity firms
W#2: International expansion may drain
S#2. Increase user base with the integration technical resources due to its localisation
of SurveyMonkey platform with other efforts to support language and payment
developers and acquisitions processing

S#3: Leverage on its global presence in 190 W#3: Potential backlash for SurveyMonkeys
countries who made up 2530% of the user enterprise solution as users were more
base and 45% of them were premium familiar with a customised SaaS solution
consumers (page 4 para 2).
W#4: The lack of a salesforce to promote the
S#4: Facilitate users with effective survey enterprise solution
design via Question Bank and allow survey
creators to access to a large panel of high
quality respondents via Audience (page 9 &
10).
Opportunity Threat

O#1: Individuals seek to use affordable DIY T#1: Outdated technology or programming
survey to collect data, even customers used it software may deter potential partnership or
for professional settings alliances

O#2: International customers show interest T#2: High competitive rivalry due to low
in online surveys despite language and product differentiation
currency barrier
T#3: High power of buyers low switching
cost

Question 3 (b)

Key Issue #1: How can SurveyMonkey defend and grow its market share despite high
competition rivalry (T#2) and high churn rate of monthly subscribers from students (W#1)?

Key Issue #2: How can SurveyMonkey increase its global reach despite the high power of
buyers (T#3) and prevent excessive drain on resources, resulted from international expansion
(W#2)?
Question 4 (a)

Precision Polling Wufoo MarketTools

M&A
integration Symbiosis Preservation Absorption
matrix
High strategic
interdependence as Low strategic High strategic
Precision Polling interdependence due interdependence as
provided a built-in to its distinct offering. Zoomerang was
satellite engineering High need for SurveyMonkey's closest
team which organisational rival. ZoomPanel was
complement autonomy to retain its also capable of
Justifications
SurveyMonkeys strong brand escalating Audience
architecture. High need recognition in the field adoption due to its
of organisational of online form millions of panel
Autonomy: as Precision creation It was respondents. Low level
Polling worked within maintained as a of organisational
their own space as a separate online entity. autonomy is needed.
small team in Seattle.
Page 10 para;
Citation Page 10 para 1 Page 11 para 2
Page 11 para 1
SurveyMonkey is seen as a serial acquirer as it bought over 3 companies within a year. As
illustrated in SC#2, the company leveraged on its highly skilled top management, especially
Brent Chudoba, the General Manger of SurveyMonkey Audience and Damon Cronkey,
Corporate Development & Strategy. Both personnel came from Investment Banking
background and were well versed in executing mergers and acquisitions projects (Exhibit 1).
Hence, they would be able to guide and advise the company on the best practices during the
pre and post acquisitions.

Question 4 (b)

SurveyMonkeys approach is based on open innovation. An organisation adopts open

innovation to accelerate and improve its innovation based on an intentional exchange of
import and export knowledge (Johnson, Whittington, Scholes, Angwin, & Regner, 2014).

In SurveyMonkeys case, the deliberate import of knowledge would be to rewrite the current
programming from .NET to Python language. It is a shift towards open source technologies,
which is highly favoured by Silicon Valley engineers (page 4 para 4). This is to facilitate
recruitment of top engineers which is prevalent for SurveyMonkeys ongoing reengineering
effort (page 4 para 4). Import of knowledge includes acquisitions of Precision Polling, Wufoo
and MarketTools which are meant to enhance SurveyMonkey capabilities and user base.

The deliberate export of knowledge would be based on API that allow other developers to
integrate SurveyMonkeys functionality into their own software products such as EventBrite,
MailChimp and ZenDesk (page 12 para 1). This innovation exposed the company to wider
use base and allow consumers to enjoy both integrated function as one-stop solution.

SurveyMonkey innovation strategies under Dave Goldberg was predominantly a business

driven strategy. A business model outlines how an organisation manages profit and costs by
organising its structural activities (Johnson, Whittington, Scholes, Angwin, & Regner, 2014).
Goldberg views SurveyMonkey beyond just a technological overhaul but consider other
aspects of activities as well.

Business driven framework is centred around the understanding of its product and selling. For
example, the company capitalised on its vast database to launch Audience product which
consumers can data mine for survey respondents and the service raked in multi-million
revenues in the first year (page 10 para 2). As for the selling, the company decided to move
away from high risk monthly subscribers to promote annual memberships to bump its
revenue (page 5 para 4). Enterprise solution was also introduced outside of its core offerings
as it was deemed as a revenue driver (page 13 para 3).

Question 5

Recommendation to Key Issue #1 (click on hyperlink):

Collaborate with schools to provide enterprise solution for teachers to manage family/school
relationship with their students as parents deem this to be a key area of assessment (page 13
para 1). SurveyMonkey can push its Platinum package which has the capacity to allow users
to administer and deploy accounts across an organisation (page 12 para 2). This is to address
high competitive rivalry (T#1) by exploiting existing demand from schools which could make
up for the high drop-out rate from monthly subscribers as partnership with schools is a longer
term horizon.

Justifications:

S#4: Parent Surveys for K-12 Schools was the most sought after survey template from the
Question Bank (page 12 para 4)

O#1: Individuals seek to use affordable DIY survey to collect data, even customers used it for
professional settings

Recommendation to Key Issue #2:

Curate the most strategic markets to penetrate based on value rather than focusing on all 190
markets. Select the countries with the highest premium users which demonstrate organic
demand. This is aligned with SurveyMonkeys strategy to push the higher-value annual
membership which only work for saturated markets and less so for markets like Korea which
is still grappling with the foundational use (page 5 para 5).

Justifications:

S#3: Leverage on its global presence in 190 countries who made up 2530% of the user base
and 45% of them were premium consumers (page 4 para 2).

O#2: International customers show interest in online surveys despite language and currency
barrier
 References

Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regner, P. (2014). Exploring
Strategy. United Kingdom: Pearson Education Limited.

Rosenthal, S., Burgelman, R., Littlefield, E. W., & Siegel, R. (2014). SurveyMonkey in 2014.
California: Harvard Business Publishing.