«What.” is a well-known digital agency in Switzerland that provides a wide range of innovative services to people interested in business promotion. The company has been operating on the market for more than seven years and has successfully implemented many valuable and practical concepts. Nevertheless, the need for innovative business development has increased the requirements for many organizations and complicated the conditions of competition in the economy. Thus, in order to maintain a leading position in the industry, «What.” must turn to a strategy of core competencies in the role of superiority over opponents based on such attributes of goods or services as consumer value, uniqueness, or novelty. Thus, the primary purpose of this paper is a comprehensive study of the Swiss company «What.” within the SWOT analysis framework, the proposed future strategy, and an in-depth investigation of the applied concept. The data collection methodology is based on scientific approaches from the point of view of empirical and theoretical levels aimed at comparing, measuring, analyzing, and synthesizing the data obtained based on the student’s professional experience and reliable sources of information.
The results made it possible to identify key opportunities, threats, strengths and weaknesses of the company, current strategies and the degree of their effectiveness, as well as opportunities for growth and development of the company taking into account potential obstacles. The author proposed a recommendation for the company aimed at establishing and developing the company’s key competencies within the framework of the implementation of competitiveness, efficiency, and effectiveness within the framework of complete digitalization, establishing the ROMI indicator, and obtaining recurrent revenue and entering a large market. In addition, the student identified the strengths and weaknesses of the strategy based on core competencies, as well as determined the best methods of working the concept in practice.
SWOT: The Current Position
«What.” is a Swiss company providing a wide range of digital services inside and outside the native country: digital strategy & workshops, growth hacking, and web/app design and development. Founded in 2015, the firm, for more than seven years, has helped many people realize successful and thriving businesses through market entries, online sales, and several broad digital strategies (Develop your digital business with what, no date, para. 3). At the moment, «What.” is a leading provider of “digital assistance” for lean organizations and one of the best growth hacking and development agencies for modern enterprises.
SWOT Analysis
It should be emphasized that to accurately, correctly, competently, and objectively determine the company’s current position in the market, it is necessary to conduct a holistic and comprehensive analysis of the firm’s strengths and weaknesses, as well as potential threats and opportunities for growth and development. Firstly, the key strengths of «What.” are the power of the brand and its recognition, a strong team of experts interested in their business, and the availability of an innovative business model and a wide range of various digital services at competitive prices. Unlike traditional digital agencies, «What.” fits perfectly into the methodology of lean startup development from the point of view of modern and innovative approaches while having an extensive client base in several countries of the world and a lot of positive feedback. It offers its customers a rich selection and range of services for every taste, starting with digital analysis audit and ending with optimization of the web page speed. The company’s business model is convenient, informative, and simple in its essence and nature, bringing diversity and creativity to projects. The business’s team comprises specialists of various profiles involved in love with their work.
Secondly, the company has weaknesses such as dependence on the “human factor,” regular costs for updating and purchasing software, as well as high reliance on the regulatory policies of states. For instance, the problem of the “human factor” is mainly expressed in the manifestation of errors in the interaction of a complex system “man-technique.” The business in a virtual environment requires constant investments since many programs are constantly being updated and improved. In addition, the policies and several restrictions formed by the Swiss and other countries’ governments can radically change the direction of the firm’s movement.
Thirdly, among the opportunities for growth and development of the organization should be highlighted is the chance to introduce new inventions and innovations to improve services, as well as the possibility of expanding the geography of sales not only within Switzerland but also abroad. Progress does not stand still, and almost every day, various technologies could be helpful for «What.” Moreover, the company has employees from different countries and regions, which means it has a chance to increase and expand its business.
Fourthly, threats to the company include the risk of new players in the industry and the strengthening of existing competition, strong dependence on the desires and needs of customers, as well as the likelihood of encountering various difficulties and obstacles due to the use of a new business model. For example, among the firm’s competitors, Creative Supply, distylerie, dreipol, FEINHEIT, FOUNDRY, heimoto, HOCHSPANNUNG, and many others can be distinguished (Best digital marketing agencies in Zurich, no date, para. 1). Furthermore, if the focus of the targeted audience shifts to another type of business promotion, then «What.” may expect various kinds of difficulties in the near future. Moreover, in some sense, the organization’s business model can be described as new and unusual for some people; it has not yet been thoroughly studied and analyzed and may entail some risks. Furthermore, Appendix A: SWOT Analysis demonstrates the graphic and understandable version of this SWOT analysis.
The Current Strategies and the Degree of their Effectiveness
The current strategies of «What.” are based on providing digital services to lean organizations in building a commercially successful business through the prism of combining technical, marketing, and business aspects. The company’s philosophy is based on entrepreneurial principles and the introduction of values, user focus, feedback, dexterity, prototyping, testing, and availability of finished products (Develop your digital business with what, no date, para. 9-12). The firm generally focuses on the cost-effective provision of resources through lean processes and global networks (Develop your digital business with what, no date, para. 1-2). Innovative technologies, revolutionary solutions, efficiency, and effectiveness of marketing campaigns are fundamental aspects and the main priorities on which «What.” relies in its activities.
It is necessary to emphasize that these tactics and procedures are among the most reliable, valuable, and sufficient. In particular, «What.” keeps up with the times, actively appealing to modern phenomena and innovative trends, solving clients’ tasks effectively, and successfully adapting to new conditions. Moreover, due to these methods, «What.” clearly and precisely sets priorities for the target audience, better understands clients’ needs, and impresses customers with the advantages of the services provided.
Main Challenges and Opportunities
As previously indicated, the significant obstacles and challenges of «What.” include a high share of competition, strong dependence on people from the point of view of the company’s primary asset, as well as the risk of unexpected cases taking into account the new business model used. In this situation, «What.” should concentrate on creating, developing, and implementing improved strategies aimed at taking leadership positions in the niche, enhancing the type and form of interaction with customers, and strengthening internal systems and processes. Nonetheless, this digital agency has the amplest opportunities for introducing new technologies and the subsequent improvement of the quality and quantity of services offered, as well as business expansion in terms of geography. Therefore, it is recommended that «What.” additionally focus on these points and try to become not only an effective company but also unique in its segment.
Recommendations
Based on individual experience, knowledge, and ideas about the company and the market in which it operates, it should be remarked that the strategy established on core competencies will be the best solution for «What.” and its employees. It is known that core competencies consist of business development and promotion tactics and products that generally increase business efficiency (Lee, Wu, and Jong, 2022, p. 2). As a rule, they are perceived as a specific resource acquired through collective learning and experience accumulation. In addition, it is essential to emphasize that this resource, based on the use of technologies, innovations, knowledge, skills, and talents of personnel, manifests itself in the process of production, and distribution of goods or services and is of value to consumers. Creating an effective model of critical competencies is a springboard for the business to jump into a better future, as it allows one to manage all business processes in the HR sphere effectively.
Of the alternative futures for the organization, it is recommended for the business to move in the direction of the formation of the new competencies, as well as the assessment, revision, development, and modification of the existing ones. This will require the implementation of high-quality management of human resources, knowledge bases, and intellectual capital, as well as the implementation of coordination and unification of efforts of working groups, departments, and external partners. Thus, the main recommendation that an organization should follow is following the concept of strategic management to expand and improve its activities. This implies that «What.” should move towards such competency as the implementation of absolute digitality, maintaining a return on marketing investment (ROMI) indicator. It should be no more than 50% and focus on receiving recurrent revenue and entering a large market. Further, this work will provide some aspects that will help the company determine the main aspects of future strategic management.
The recommended strategy for the desired future, poses some necessary steps that must be followed by the company. Firstly, «What.” should focus on adjusting and managing its digital toolkit to optimize internal business processes. Fewer elements integrated into the work process guarantee reliability, efficiency, and stability of work operations, actions, and decisions. In particular, this process implies that the company creates an excessive number of tools by trying to find suitable solutions for every task at hand. Research stated that “is aimed at ensuring that companies make decisions quickly, quickly adapt their work to the requirements of the current moment and satisfy the needs of customers” (Prokopenko et al., 2020, p. 2). It is challenging to master a wide variety of procedures and operations, and it is rarely possible to avoid the most straightforward mistakes. In such a way, operating many tools and deciding which one fits the assignment the best is a slow and tedious process when speed is one of the most valuable qualities on the market.
Instead, the focus, in the proposed strategic management framework, should be on optimizing the system for convenience and combining the tools, creating a new set of appliances that would accelerate the workflow and improve user experience. In an era of rapid changes, the business must constantly and continuously change and improve its work processes; otherwise, there is a significant risk of being left behind by competitors or even stagnating altogether. Therefore, a firm has to accept and adopt the new fast ways of programming. Hence, enhancing the work process this way will allow “What.” to adapt to the quick pace of doing business and avoid making mistakes.
Secondly, to form competitiveness and occupy leadership positions in the market, «What.” needs to rely on crucial competence based on the ROMI marketing metric, which permits the company to reduce the costs of attracting a client due to its expertise. In simple terms, without any doubt, in a market where “the price of a customer” is almost the same for every business, a digital agency has nothing much to do since it will need to compete with products. Most of them are at the minimum viable product (MVP) stage and will require a lot of money, energy, time and other resources for their development (Nguyen-Duc, 2020). ROMI has a high value and special significance, giving “What.” a clear and objective idea of the profit level one can obtain through investments or contributions to advertising.
With the help of an effective strategic management, the firm can give a formative assessment of the productiveness of commerce instruments, adjust tactics, abandon unprofitable channels and make the budget gainful. By calculating such an indicator, the organization may determine the most influential channel, deciding to expand, reduce or completely abandon the budget, estimating the break-even point. Moreover, it will give the company additional opportunities to change ongoing promotion campaigns and disable weak ones, increase or decrease the advertising funding following efficiency, analyze channels to improve business efficiency, and experiment and test new ideas by launching more cost-profitable advertising campaigns.
Thirdly, from the point of view of recurrent revenues competency, the products should have a subscription model in which each user can pay the company monthly. Indeed, “What.” is on the right track because it does not lose users, and attracting new ones is the firm’s strong point. In addition, it is necessary to mention that recurrent payments directly affect finances and indirectly affect various other indicators. Due to them, the firm can sell inexpensive services to new clients and activate them in the first purchase, which would have left earlier. Moreover, it will be able to create additional products for existing users who have already completed the cycle in the current funnel but are loyal and ready to buy more-continuing the story with customers who have completed the standard rotation, “What.” lengthens the existing one and makes it conditionally infinite. Furthermore, a paying client is more loyal by default; due to recurrent payments, the interaction procedure between a buyer and the business will increase, and «What.” will have the chance to build a more protracted process of relationships almost automatically.
Therefore, the possibility of implementing this concept permits «What.” to increase profits and retain clients. It is logical that if access to the service needs to be paid for anew each time, a user may forget, change their mind or choose another company. In the case of automatic payment, there is less desire to alter the service because one will have to perform too many actions: disable one subscription, search for another firm, make payments again and conduct other equivalent activities.
Fourthly, from the point of view of the key concept aimed at expanding the company’s activities, «What.” can enter a large market. It is no secret that the demand for digital agencies is small, and there is no need to limit oneself when the firm can “play big.” By entering the international market, tasks related to increasing profits, reducing risks, diversifying the customer base, simplifying settlements with foreign counterparties, tax benefits, government support, and a number of other equally important aspects will be solved. New foreign markets, as a rule, are more extensive and promising than home ones, and the conditions for doing business in another jurisdiction are often convenient. Although, even if new customers turn out to be poorer, and the sales volume in another country will be less than at home, «What.” will, in any case, sell more services and products than competitors remaining on the domestic market.
As practice shows, a business operating in several states at once is less at risk of going bankrupt if it competently distributes its resources between representative offices. In particular, «What.” can open and close individual branches, customers may leave, and the company is even able to abolish the head office. Nonetheless, the critical concept and the project will remain afloat if its profit is generated from several sources located in two or more jurisdictions at once. Opening a foreign branch will significantly facilitate work with large financial institutions, reliably protect funds and simplify settlements with customers and suppliers. In addition, the authorities of some countries support the development of small and medium-sized businesses by all available means as a source of tax revenues for the budget. The peculiarities of legislation in some regions authorize aspiring entrepreneurs of foreign origin to significantly reduce the tax burden on their firms when entering the international market.
Therefore, the author would like to add that there is a myriad of different practical and impressive core competencies. Nevertheless, the concepts selected in the current paper are an excellent choice in terms of modern innovations and industry features. By the way, the list of competencies presented earlier is not exhaustive. Still, it is enough to briefly familiarize a reader with the proposed changes for a better company’s future.
Academic Analysis: Strengths
Today, many scientists, researchers, entrepreneurs, and other experts interested in business and management agree that core competencies are one of the most significant and critically essential elements regarding their uniqueness, originality, distinctiveness, and difficulties in imitating them. By their essence and nature, they are designed to be valuable assets and skills aimed at increasing, improving, and developing the ability to innovate or achieve commercial success (Seram, Nanayakkara, Lanarolle, 2019, p. 355). In addition, according to several experts, the vital role of these competencies is to determine competitive advantages (Chursin and Tyulin, 2018, p. 3). The strategy of such competencies is designed to explain the phenomenon of overcoming difficulties and maintaining the organization’s strategic position (Irtaimeh, 2018, p. 171). Hence, they are the basis of the “controversial advantages,” the key to triumph, and an exceptional opportunity for effective and productive work in a business environment, taking into account various difficulties, obstacles, and problems (Lee, Wu, and Jong, 2022, p. 2). Accordingly, their presence allows an organization to solve tasks beyond the capacity of most other market players, thereby contributing to taking leadership positions.
In addition, core competencies are perceived not only as a set of complementary skills and technologies that gives fantastic results and makes the most outstanding contribution to the value perceived by a consumer but also as the “soul” of a firm, the strategic potential. Primarily, key competencies are the know-how, knowledge, and skills of a firm, acting similarly as in the case of the role of implicit knowledge in models of aggregated growth (Seddighi and Mathew, 2020, p. 219). Duda and Skalna (2019, p. 20) claim that these competencies largely correlate with companies’ unique resources, which are employees’ awareness and abilities. Consequently, their formation, development, and improvement can serve as a starting point for a company’s sustainable and effective growth with a view to the future (Seddighi and Mathew, 2020, p. 219). Due to them, a company can develop, improve, modify, or combine innovations and knowledge in the process of regional revival to surpass opponents (Lee, Wu, and Jong, 2022, p. 2). Thus, there is an influential strategic role in developing critical competencies when the efforts of top management and ordinary employees of a company are combined and directed towards achieving the organization’s long-term goals.
Core competencies are a source of the most significant number and variety of properties of goods and services. The importance of core competencies is excellent because they represent a fundamental intellectual means for the production of valuable products or services (Edgar and Lockwood, 2021, p. 1). For instance, according to De Oliveira, A. C. et al. (2018, p. 85), they are vital in any organization that permits one to use market opportunities and create value, originality, individualism, and uniqueness in the services or products traded. As practice shows, with competent actions, core competencies lead to creating exceptional products, providing a company with primacy in entering new markets, and significant advantages in solving tasks that will become a field of fierce competition. Due to them, a company can do certain products at a sufficiently high level and ensure high success in the long term (Krishnan and Islam, 2019, p. 25). In most cases, it is difficult for competitors, suppliers, and partners to imitate or similarly reproduce competencies; this is their main advantage (Irtaimeh, 2018, p. 172). As a rule, in a controversial environment, firms strive to protect themselves in order to maintain an “advantage in battle.”
Without any doubt, competently and correctly designated key competencies bring both values to clients and give wealth to organizations. Therefore, the definition of them, a priori, makes it possible to identify and analyze existing and potential opportunities for entering a new market or developing new products based on revolutionary solutions, innovative technologies, and three categories of sustainability (De Oliveira, A. C. et al., 2018, p. 85). Hence, a timely understanding of core competencies opens the way to long-term leadership in the market, and the leadership gained, in turn, requires focusing efforts on these competencies.
It should be mentioned that core competencies, in some sense, are a glue that holds all business components together and, simultaneously, are the driving force behind developing new company areas. Competencies are a kind of “dynamic learned resource” that is subject to changes, transformations and metamorphoses due to the dynamic internal and external environment; their development takes a significant amount of time, but later this process can lead to excellent results (Krishnan and Islam, 2019, p. 26). A distinctive characteristic of competencies is their overtime development and continuous achievement of the most critical factors of the company’s success over time (Irtaimeh, 2018, p. 172). A firm that lacks key competencies is significantly inferior to a firm that has them in terms of financial, production, management, and other aspects (Krishnan and Islam, 2019, p. 25). Consequently, a strategy based on core competencies is one of the strongest, most practical, and most efficacious for a company since it has many favorable and positive elements.
Weaknesses
Despite the strategy’s strengths, benefits, and advantages based on core competencies, this tactic has weaknesses, shortcomings, disadvantages, and other negative aspects, which should be paid special attention to further. Primarily, there is a wide range of different factors contributing to constraints in terms of limiting the potential of crucial competencies and expanding a business (Bhasin, 2021, para. 18). Thus, for example, it is important to remark that one of the scientists insists that core competencies are nothing more than a sign of a company’s potential, which does not give corporation competitive advantages without pooling resources and creating measurable value for a client (Duda and Skalna, 2019, p. 19). Additionally, the process of identifying core competencies may become an obstacle to realizing success, well-being, and the best results with too much reliance on particular benefits (Masud, 2022, para. 14-15). Sometimes it is challenging to identify a company’s core competencies if one considers them from a functional point of view and not from the main processes.
Moreover, another weakness is related to the temptation to replace core competencies with the concept of “strengths.” Accordingly, the definition of competencies makes it inquiring about dispersing knowledge in a firm, as well as the fact that this information is not officially formulated. Hence, a corporation has accumulated the wisdom and skills of employees as a result of technical training and long-term experience. In addition, management systems, values, norms, and organizational culture combine individual abilities into a connected whole. Nevertheless, comprehending these internal relationships, and most importantly, assessing them from the standpoint of creating value perceived by consumers, is a non–trivial task of modern management. Consequently, methodological difficulties combined with the lack of necessary skills for managers to work with competencies leads to the fact that this significant asset of enterprises is almost not used in developing strategies, including innovation approaches.
Furthermore, inaccurate, incorrect, and unqualified designation of specific products and identification of an organization’s strengths as key competencies can lead to difficulties and problems, mainly if leaders focus exclusively on the positive elements. Inaccuracies, errors, and inconsistencies in the process of determining competencies and competitive advantages can result in a loss of investment, time, effort, and other resources for a company (Burch, 2018, para. 4). In particular, not every competence can be stable over time, especially one that is neglected or taken for granted (Burch, 2018, para. 5). Indeed, new goods and services will appear in the future, the creation of which is not yet possible; new industries and new products will arise, which people do not think about now. Managers do not always understand that all such uncertainties will impact their business, and therefore they face relatively tricky questions about what the competitive arena may look like in the future.
The strategy of core competencies is particularly susceptible to different external influences. For instance, the COVID-19 outbreak has demonstrated various vulnerabilities and weaknesses of such competencies within the framework of business functioning (Drozdowski, Rogozińska-Mitrut, and Stasiak, 2021, p. 107). Based on the specific conditions and the circumstances, it was revealed that not every leader is ready to control the situation through competent resource management in conditions of increased risk (Drozdowski, Rogozińska-Mitrut, and Stasiak, 2021, p. 107). Thus, the approach is not guaranteeing a company’s success and prosperity, ensuring competitiveness for many years. On the contrary, managers face a wide range of issues in forecasting a firm’s future using this strategy. At the same time, a business needs to constantly change, modify internal procedures and adapt to the rapidly changing external environment.
The Best Way to Make the Concept Work in Practice
In order for the fundamental competencies model to work in practice, it is not enough that a personnel department comes up with core competencies and familiarizes a firm’s employees with the results of their work. The entire management team should participate in its formation, and it is necessary to use a group work format — for example, a “management session.” During the “management session,” a group of managers jointly, within the framework of party work using “brainstorming,” develops the organization’s competencies and ones at hierarchical levels of a corporation’s personnel. Such a session presupposes the presence of a leader who manages the process and ensures the achievement of the goals for which it is organized. Otherwise, a “management session” risks turning into a production meeting or an even less formal event with an uncertain result. A head sets the sequence of actions, summarizes the results, and directs a team’s activities in a constructive direction.
The foundation for the core competencies model is the company’s strategic priorities; based on them, the organization’s competencies are set. Further, the organization’s abilities are crucial at various hierarchical levels and, ultimately, at specific positions and specialties. In addition to defining the critical competencies, it is essential to determine their status for each position; a personnel department can take over the details at this stage. The required level of the same capability for different employees will differ because where a top manager needs a high level of competence, a line specialist may need a basic one.
Making the Concept Work
Furthermore, for the concept to work, «What.” needs to consider the following aspects. Primarily, the company must identify, highlight and synthesize the firm’s special, unique and inimitable competencies that allow «What.” to solve tasks beyond the capacity of most other market players, set new industry activities standards, and provide the firm with a competitive advantage. It is recommended to describe all the critical aspects of the organization in acceptable terms. It should be noted that one of the best ways to determine a company’s core competencies is by identifying key customers, the nature of their needs, and the company’s role in meeting these needs.
Moreover, various classifications and comparisons of a company’s competencies with competitors can help identify a firm’s necessary abilities through benchmarking or technological audits. It is important to remember that the definition of a business’s core competencies is not based on industry norms; instead, on the contrary, the best companies constantly violate these norms by changing the structure of the industry or the rules of competition. In particular, «What.” should agree on which skills should be included in the competencies. In addition, the firm must establish and realize the connection between competencies and customers’ perceived values and benefits.
As part of the analysis of the company’s key characteristics, it is vital to consider the individual elements of the products, their uniqueness, and originality at the level of consumer benefits. From the standpoint of the formation of additional value for clients, it is critical to specify the general advantages of the product category without mixing them with the particular benefits of each individual type of product. Furthermore, it is essential to consider the current and desired product and service positioning. At the same time, the company must be able to separate its competencies from the products in which they are embodied. It is this skill that can provide access to other markets.
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Appendix
SWOT Analysis
Figure 1: SWOT Analysis