Question 1(a)

Introduction
This case is about the web-based survey solution industry and the time period is from
2009 onwards. The case is talking about the development of SurveyMonkey from its
foundation in 1999 through to 2004 which was after the acquisition of
SurveyMonkey.

PESTEL analysis
Social
People use online survey result to make decision with data.(p3) For example,
individuals were interested in conducting their own surveys from focused academic or
market research to polling family members on the best dates for the family picnic.(p8)
Moreover, the company were using the survey results for the purpose of amassing
proprietary data on a brand, product, behavior or industry.(p6) Some of the large
companies also used the survey result as the source of customer satisfaction, buyer
behavior, customer data and etc.(p6) The trend of using online survey result to make
decision with data in both individual and corporate level provide the opportunities for
the web-base survey solution industry.

Technological
Technology development in IT, comprehensive software solutions, and online market
research tool enable the both individual and company to make use of the survey
results for their own purpose. For instance, there are companies who offered the
services in both the syndicate and custom data sectors; there are companies that
provided full-services; and there are also Software-as-a-Service (SaaS) providers in
the market.(p6-p7) The Technology plays a very important role in this web-based
survey solution industry and the technology development provide the opportunities
for it as well.

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Conclusion
As per the case, there are no relevant case evidences on political, economic,
ecological and legal. Overall, the macro-environment is favorable as of 2009, with
opportunities arising from social trends and the development of technology. Social
changes is significant as there is a trend for people using online survey results to make
decision. Actually web-based survey solution is both B2C and B2B business. It needs
to keep track of social trend which will impact demand for its products and services.
The technological portion is dominant as the web-based survey solution industry is
technology-driven and the technology will impact its operation process and marketing
aspects.

Question 1(b)
Threats of New-Entrants
Scale and Experience

Explanation
Experience and scale are not critical.

Level of Threat
Moderate

Moderately easy to enter the industry.

The new entrants can easily started up
the business in web-based survey
industry without substantial investment.
The Internet has made this a reality.
However, it is not easy for new entrants
to grow up in the long run.
Product differentiation

Different customer or company has

different needs or requirements from
the web-base survey solution provider;
higher perceived value if suits
consumer tastes. The new entrants has
to develop their products/ services
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Moderate

creatively to differentiate from

competitors in the market
Access to supply or

The distribution channel for Web-based

distribution channels

survey solution is the internet. The new

High

entrants are able to launch their services

easily via internet
Expected retaliation

Expected retaliation of existing

High

company is low due to highly

fragmented market as competitors
compete in different market segment.
Legislation/ Government

N/A

N/A

action
Sub-Conclusion
Overall the threat of new entrants is relatively moderate. It is easy to enter this industry
as not much experience is required and the products/ services can be easily launched via
internet. The barrier of entry is low, although the product differentiation is important for
new entrants competing in the market.

The Power of Buyer

Concentration of buyers,
relative to suppliers

Explanation
Low concentration as there are more

Power of buyer
Low

customers compared to companies

(SurveyMonkey and others) providing web-based survey solution.

Large customer/ subscriber base which
lowers concentration of buyers
Switching costs

Switching cost is low. For customer

without subscription, they can easily
switch to another online survey
solution provider without any cost. For
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High

subscriber who paid for the

subscription fee, they also can easily
cancel the membership or switch from
one to another upon completion of
their membership with current service
provider.
Buyers competition threat

Customer's capabilities to design their

Moderate to Low

own online survey tools. Some

customers are unlikely to design their
own online survey tools but some
customer did that. For example,
Finley, the founder of SurveyMonkey,
constructed his own survey tools to
compete with other service providers,
which how SurveyMonkey was
created.

Sub-Conclusion
The power of buyer is moderate. Due to the fragmented market, SurveyMonkey and
competitors are not able to take advantage of the low concentration of buyers. The
switching costs indicates high bargaining power of buyers. In this B2C business, customer
with free service can easily switch to other service providers. Customers who paid for the
services, they also can switch to others or cancel their membership. SurveyMonkey and
competitors are not able to retaliate in the event of backward integration. Moreover, a new
player will not make much difference in a fragmented market as there are lots of players
in the market.

The Power of Suppliers

Explanation
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Power of

supplier
Concentration of

The available talent pool of labour in the

suppliers

market is the supplier. For instance, the

High

engineers, software developers. These are

expertise which means that the number of
suppliers is limited relative to the market.
High concentration because the number of
supplier is low compare with the web-based
survey solution provider, which resulting in
suppliers' high power
Switching costs

N/A

N/A

Supplier competition

Supplier can take the forward vertical

Moderate

threat

integration, designing their own online

survey tools to approach to customer
directly. Supplier competition threat is
moderate as the threat of forward
integration by supplier is moderate.

Conclusion
Overall, the power of supplier is moderate. The suppliers such as engineers, web or
software developer have a high bargaining power. These expertise's bargaining power is
high relative to buyers. There is a moderate threat of forward integration by supplier

Threat of Substitutes

Explanation

Threat of
substitutes

Price/performance ratio

Compare with the web-based survey

solution, the phone-based survey, written
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Low

form survey, video interview and etc will

be the substitutes. Price/performance ratio
is poorer for substitutes in terms of the
user-friendly functions, efficiency, number
of customers that can be reached. For webbased survey solution provider, they have
the user-friendly interface, large user data
base. It will be more efficient to do online
survey.
Extra industry effect

N/A

N/A

Conclusion
Overall, power of substitute is low. Customer who choose online survey are those who
prefer more convenient and efficient way. Unless the "value" of substitutes is close to that
web-based survey solution at a lower price, traditional way of survey will not pose a
threat.

Competitive Rivalry

Explanation

Competitive
rivalry

Competitor balance
Industry Growth Rate

N/A
Market research was a $39 billion a year

N/A
High

industry. The large demand for data drive

the industry growth The market is not that
saturation because the customers are their
marketers and they are allowed to get as
many customers as possible.
Fixed cost

Fixed cost is low, a person with computer

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Low

and internet will be able to build their webbased survey platform.

Exit Barrier

Initial investment is not high, so exit barrier

Low

is low. Competitors find it easy to exit, so it

is less competitive
Differentiation

Differentiation is high among competitor.

High

There are product/ service in that market to

serve the different target group. For
example, full-service providers, mid-level
service providers. Some of them target on
syndicated and customer data, some
targeted on academic institutions, some
targeted on individual customer and some
targeted on enterprise solution.
Conclusion
Overall, competitive rivalry is high due to high industry growth rate as this results in
incumbents fighting to get more customers to protect the market share. Fixed cost and exit
barrier are low so that competitor can easily exit from the business. High differentiation
between competitors targeting the different kind of area.

Conclusion on Porter's 5 Forces

Web-based survey solution industry is relatively attractive. The threat of new entrants
is relatively moderate. Although the entry barriers is low, it required product
differentiation to compete in the market. Both power of buyers and power of supplier
are moderate. The threats of substitute is low as the substitutes are not able to provide
the same "value" as the web-based survey solution so that customer will still go for
online survey.

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Question 2(a)
Bundled Resources (what Competencies (what does

Strategic Capabilities

does company have)

company do by using the

Human resources

resources)
SurveyMonkey was able to SC#1: Capable of hiring

SurveyMonkey is able to

facilitate recruitment of

the professional of high

hire top Silicon Valley

top Silicon Valley

expertise to form a strong

engineers

engineers via the most

management team and

flexible platform

engineers team to rebuild

Innovation &

the entire technology

Technological

platform as well as expand

Created the most flexible

internationally.

platform for recruitment.

Management and
Leadership
SurveyMonkey had
Goldberg as CEO who is
given operational
experience, strategic
vision, teambuilding
expertise, and extensive
network. Goldberg build
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the management team who

were with deep
experiences in online
consumer products, top
management background
in big company like
Google
Management and

SurveyMonkey was able to SC#2: Capable of

Leadership

raise fund and the financial successfully managing the

SurveyMonkey had

status is quite stable and

several acquisitions to

Goldberg as CEO who is

strong which gave

expand its business

given operational

investors confidence.CEO

experience, strategic

was able to recruit highly

vision, teambuilding

professional and

expertise, and extensive

experienced expertises.

network. Goldberg build

the management team who
were with deep
experiences in online
consumer products, top
management background
in big company like
Google

Financial
- rounding out 2010,
SurveyMonkey announced
the closing of $100 million
in senior debt financing
- By 2012, SurveyMonkey
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finished an $800 million

secondary financing raise
to give its employees and
investors liquidity in lieu
of an IPO.
Innovation &

SurveyMonkey was able to SC#3:Capable of

Technological

design new tools,

developing a user-friendly

- Localized the

platforms and portal at the

platform and tools as well

SurveyMonkey website to

same time rebuilding its

as upgrading the current

support the language and

current website to make it

website function to

currency of its most

localized in terms of

enhance users' experiences.

prevalent international

language and currency.

user
- Created do-it-yourself
market research tool with
user-friendly interface and
affordable price point
- Created the question
bank
- Launched Developer
portal
- Launched an enterprise
solution

Conclusion
SurveyMonkey's key strategic capabilities are based on its strong management team,
professional engineers, healthy financial status and innovative spirit within the
company resulting in strong top management team and professional engineers. This
most likely helped SurveyMonkey to expand globally and establish itself as a
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dominant player not only in B2C market but B2B market to compete with other big
players in the B2B business.
.

Question 2(b)
Using the VRIO test to identified SurveyMonkey's competitive advantages.
Strategic Capabilities

Is valuable?

Is rare?

Is difficult to

Supported by

Competitive

imitate?

the

Implication

SC#1: Capable of hiring

Yes

Yes

Yes

organization?
Yes

the professional of high

Yes, it is

Strong top

Strong

Organization

competitive

management

management,

supported the

advantage

expertise to form a strong valuable.

management team and

Strong top

team and

professional

recruitment by

engineers team to rebuild

management

professional

engineers,

establishing

the entire technology

team and

engineers can

teambuilding

the recruitment

platform as well as

professional

only be

which cannot

platform. CEO

expand internationally

engineer are

acquired by

be achieved

form the

intangible

few

by just

management

assets of the

company.

putting in

team

company
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Sustained

which enable

money.

the company to
exploit
opportunities.

SC#2: Capable of

Yes

Yes

Yes

Yes

Sustained

successfully managing

Acquisitions

Not many

The

All the

competitive

the several acquisitions

and business

company has

acquisition

acquisitions

advantage

to expand its business

expansion

the recourses

and business

and business

helped

to do

expansion

expansion

company to

acquisition

may not be

were supported

increase the

and business

done

by company

perceived

expansion

successfully

customer value

with good

by

financial

improvement

status

of
differentiation
of its product
SC#3:Capable of

and services
Yes

No

developing a user-

Website

With IT

friendly platform and

upgrading and

professionals

tools as well as

user-friendly

and

upgrading the current

platform are

engineers,

website function to

valued by

these website

enhance users'

customer

upgrading

experiences.

and userfriendly

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Competitive
parity

platform can
be done by
other
company as
well.
Therefore, it
is not rare.

Question 2(c)
The key weakness of SurvyMonkey arises from its small business units and highly
depends on acquisition to expand its business. Although SurveyMonkey had healthy
stream of revenue to fuel operation, it still required extensive resources to proceed
with the acquisitions. At the same time, there were multiple major growth initiatives
in progress which may be affected by acquisitions.

Question 3(a)
Strength

Weaknesses

1. Having a strong top management team

as well as professional engineers

1. Business unit is too small

2. Not being able to provide a localized

2. Being able to manage acquisitions

website for all countries

Successfully
3. Being able to raise fund and having a
healthy financial status
Opportunities

Threats

1. Venture capital

1. Increasing of competitors due to easy

2. Increasing demand

Entrant

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Conclusion
SurveyMonkey were having the strong management team and professional engineers
which drive the company toward to the goal. The few successful acquisitions were
helping the company to expand the business possibilities and gain more user data base
without creating significant drain on its technical resources. SurveyMonkey were able
to raise fund in the amount of $800 million which sent a positive signal to new
investor. However, SurveyMonkey has an unconventional way to market its business
which always depended on customer to act as marketers. There are opportunities for
SurveyMonkey such venture capital and increasing demand in the market yet it pose a
threat as well, because the competition is aggressive.

Question 3(b)
SurveyMonkey's key issues
With limited company resources yet multiple initiatives at the same time such as
localization of website, international expansion, enterprise, pricing system and
platform upgrading, how will SurveyMonkey be able to prioritize its avenues and
company resources for its further growth so as the company being able to achieve the
best result?

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Question 4 (a)
The most suitable approach to integration depends on two key criteria: The extent of
strategic interdependence and the need for organisational autonomy. For the extent of
strategic interdependence, the company's strategic capabilities have to be sharing or
transferring so that the value of acquisition will be created by high level of
integration. For the need for organizational autonomy, where an acquired company
has a very distinct culture or geographically distant, or is dominated by prima donna
professionals or star performers, integration may be problematic.
SurveyMonkey has done three acquisition between 2010 and 2011, which is
acquisition of Precision Polling, acquisition of Wufoo, and acquisition of MarketTools
respectively.
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Acquisition of Precision Polling

Precision Polling was acquired by SurveyMonkey in June 2010, which had developed
a self-service interface for designing and implementing surveys from start to finish via
online interface, with the unique distinction that Precision Polling's surveys were all
phone-based, which was not very compatible with SurveyMonkey. In this case,
SurveyMonkey allowed Precision Polling to continue with it old strategies and
system. People used to call it "SurveyMonkey for the Phone" earlier that year. There
are low need for integration but high need for autonomy. The acquisition of Precision
Polling did not creating a significant drain on its own technical resources. Therefore,
the acquisition integration strategy is preservation.

Acquisition of Wufoo
Wufoo was acquired by SurveyMonkey in April 2011. Wufoo was a small startup
founded in 2006 that enable easy online form creation. Wufoo allowed people to
register for events, fill out employment applications, purchase products online, and
collect customer service feedback which were able to provided beautiful product,
great team, and unit economics for SurveyMonkey. After the acquisition, there was
strong need for strategic interdependence as it expanded SurveyMonkey's
functionality as well as increased its subscriber base. In addition, there was also a
requirement for high autonomy. During the transition period, SurveyMonkey decided
to retain Wufoo as a separate online presence given its brand recognition and distinct
offering, though the team would sit under SurveyMonkey's corporate umbrella.
Therefore, the acquisition integration strategy is symbiosis.

Acquisition of MarketTools
MarketTools was acquired by SurveyMonkey in the end of 2011. Actually, there was
low need for organisational autonomy as SurveyMoneky took ownership of three of
MarketTools' products including Zoomerang which was SurveyMonkey's most
notable competitor at that time. Beside this, there was a high level of strategic
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interdependence after this acquisition. The Zoomerang acquisition not only brought
with it additional survey functionality and users, but also ZoomPanel, a survey panel
tool with represented millions of panel respondents and thousands of customers that
could accelerate adoption of the burgeoning SurveyMonkey Audience tool. Therefore,
the acquisition integration strategy is absorption.

Conclusion
Above mentioned three acquisitions integration strategies adopted by SurveyMonkey
had leveraged on SurveyMonkeys strategic capabilities which have been identified
in previous analysis. SurveyMonkey had the strong top management team who was
able to plan the multiple initiatives in line with SurveyMonkey's vision and mission
and successfully managing these three acquisition. These would prepare itself for
global expansion.

Question 4(b)
SurveyMonkey's innovation approach in market research survey for consumers was
based on open innovation. Through the acquisition of Precision Polling, Wufoo and
MarketTools, SurveyMonkey was able to expand its functionality, increase its
subscriber base, make use the ZoomPanel tool which could accelerate and enhance its
innovation process. In addition, SurveyMonkey launched its Developer portal which
would provide access to SurveyMonkey's Application Programming Interface (API),
enabling developers to integrate survey functionality into their own applications.
MailChimp, an online email marketing provider, has integrated SurveyMonkey's API
into its technology so that MailChimp users could distribute surveys and access
results via the MailChimp tool rather than two sites. Another company, Eventbrite, an
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online tool to organize promote and sell tickets to a variety of events, could poll event
attendees using SurveyMonkey technology accessed via Eventbrite interface. Besides
MailChimp and Eventbrite, a host of other companies had also taken advantage of the
opportunity to integrate the SurveyMonkey functionality into their products. The
involvement of importing and exporting of knowledge by organizations helped
SurveyMonkey platform growing that much broader and faster. Therefore,
SurveyMonkeys innovation approach in market research survey for consumers (B2C)
was based on open innovation.

SurveyMonkey innovation strategies under Dave Goldberg was predominantly

business driven. SurveyMonkey's business model innovation involved the generations
of revenues via its premium services. it continued to offer the "Basic" free product as
well as its monthly "Select" service for $24 per month. In addition, it provided a
"Gold" service whereby user paid an annual fee of $300 for access to unlimited
questions and responses, as well as handful of advanced features. It also provided a
"Platinum" service which offered several expand feature options. Thus, it can be as
effective to innovate in terms of business model as in technology.

Question 5
With limited company resources yet multiple initiatives at the same time such as
localization of website, international expansion, enterprise, pricing system and
platform upgrading, how will SurveyMonkey be able to prioritize its avenues and
company resources for its further growth so as the company being able to achieve the
best result?

SurveyMonkey could not localize all its website to suit that country's language and
currency. In order to make this happen, SurveyMonkey could partner with the
company who was specialized in Cloud design so that SurveyMonkey could integrate
with Cloud-base translation platform which can help SurveyMonkey to expand new
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global markets by being able to automatically translate the website to local language.
This kind of partnership could speed up its innovation process without creating
significant drain on its technical resources.

SurveyMonkey should solidify its position in the international markets which it have
gained and partner with company who is good at international expertise, customerfocus solutions and enterprise technology. They have to come out with the expansion
process and police to support its global expansion strategy.

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Reference List
1. Exploring Strategy text and cases by Gerry Johnson, Richard Whittington, Kevan
Scholes, Duncan Angwin, Patrick Regnr, Tenty Edition
2. SurveyMonkey in 2014, Case: E-524, Date: 09/16/14

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