INTUIT QUICKBOOKS

FROM PRODUCT TO PLATFORM

FEB 19th, 2015

PRESENTED TO – MICHEL GREICHE

PRESENTED BY:
MOHAMMED FARHANUL ISLAM
6421458
 INTRODUCTION
Intuit is a company that started from a single financial management software, Quicken and now a

leading provider for business, financial management and accounting Software for many decades.

They are always into adding value for their end user and uses customer centric approach for the

business to stay up to date with the innovation. However, with the advancement in technology

and new innovations made customers look into things in a very different perspective when it

comes to technology. Thus, emergence of platforms made customers to look for all in one

services instead of buying one individual service. This resulted in Intuit to think about their long

term sustainable growth. Moreover, knowing about their internal weaknesses (optimal

distribution within the company), they now have to decide on how to adapt their business and

corporate level strategy in the face of changing external business environment (technology,

consumer and competitive perspective) for long term growth instead of sticking to short term

profit.

PROBLEM STATEMENT
The main problem statement is, “Should Intuit change into a platform looking into their long

term sustainable growth by leveraging their internal capabilities in the face of changing

consumer demands, while maintaining best interest of all stakeholders’ (high return on

investment)”.
 EXTERNAL ANALYSIS

MARKET TRENDS
To help intuit adapt, it’s very important to do an analysis of the market and see which direction

the market is shaping into (trends) (EXHIBIT 1). In the four main component of the pest

analysis, socio-cultural and technology are going to have major impact in Intuits business model.

When looking into Socio-cultural perspective, the platform should be easy to use and very

customer focused. Moreover, the end users need to feel a connection with it like any other

technology they are using; social media. In the technological perspective, the adaptation of cloud

computing and integration is very important in the modern trend in the market. Thus, they need

to keep on innovating and making better product and platform to be ahead in the race of rapid

technological change.

PORTERS FIVE FORCES

To get a deeper understanding of the external factors, porter five forces analysis was done for

this fast changing industry (Exhibit 2).

Threat of new entrants is very high in the product industry but not for the platform .The

possibility of new entrants can make them lose market leadership. However, the process of

adoption is very slow so the impact might not be that huge. Moreover, there is low rivalry

among firms and low threat of substitutes. Bargaining power of buyer is medium for both

product and platform, simply because its time consuming to shift but they could do it anytime.
However, the bargaining power of supplier is low due to the fact that there are many 3rd party

developers to work.

The above analysis clearly shows that, moving to a platform would be more beneficial, though

both product and platform has a lot of challenges.

INDUSTRY KEY SUCCESS FACTORS

Offering innovative and comprehensive product is a key success factor in the industry. This can

be achieved through R&D, designing user friendly, customer focused products that can cater

larger target market. They can also buy in from 3rd parties when they shift to platform model.

Exhibit Moreover, integrating network effects is a necessary to achieve success (EXHIBIT 3).

Intuit does benefit from customer centric approach, R&D and large database of data. Thus, they

need focus on staying user friendly, customer centric, focusing on building comprehensive

product and managing partnership to have an upper hand in the industry.

OPPURTUNITIES & THREAT- MACRO ENVIROMENT

Intuit has the ability and potential to stay at the top even with the change in the external

environment (EXHIBIT 4). Opportunities are the market gaps that hasn’t been taken in

consideration by any player in the industry. Moreover, the fact of building software which builds

connection with the end user in personal finance software industry is yet to be capitalize.

However, there is a threat that some new entrants might take advantage of that and Intuit might

end up losing market share. They can also sell data they collect to companies or acquire few of
these companies that manipulate these data into information. However, there is always a threat of

people copying this data and selling it.

Therefore, they have to keep on innovating products to stay ahead of the game and prevent the

threat to be turned into opportunities by the competitor. This makes platform look more

attractive.

INTERNAL ANALYSIS
RESOURCES
After discussing the macro environment of SWOT analysis, it’s time to look at the micro part;

strength and weakness. Intuit has a lot of valuable resources that can help them hold their

leadership position (EXHIBIT 5). Looking at the financial perspective, they are generating

enough revenue to invest in R&D product growth. Moreover, the customer feedback and high

skilled workforce can easily help them come up with products that would easily make

competitors lack behind them. Along with that, they also made a lot of acquisitions (Turbo tax

and mint) which adds up to its innovative and knowledgeable staff to maintain their leadership

position. They also have their high reputation (intangible resource) for easy to use software

solutions that can help them sell new products in the market. Thus, they need to focus on

building long term sustainable competitive advantage using their resources to stay at the top.

VRIN ANALYSIS
Talking about VRIN analysis, the two main capabilities of Intuit is R&D, to build easy to use,

user friendly and customer centric product and high skilled worked force (EXHIBIT 6). R&D is

very important as the tech world is moving very fast and they always have to innovate to stay at
the top of the pace. However, this capabilities of R&D is valuable, non-substitutable and

imperfectly imitable leading to temporary competitive advantage. The reason being the fact that

it’s not rare. However, the skilled workforce processes sustainable competitive advantage as the

capabilities of the workforce is rare too.

Moreover, Intuit should keep on being customer centric through R&D and recruit more

knowledgeable and skill worker to maintain sustainable competitive advantage.

Core competencies
The core competencies are on the same path as the key success factors. Moreover, their core

competencies are large amount of customer data they have, their exceptional customer support

and research, strong networks in the software business, brand reputation and trust the end users

have.

Strategy
Differentiation is the key to their business level strategy. They offer products that are easy to use,

have high capabilities and easily customizable compare to other players in the market. However,

they also offer low cost products to create more value for the end user.

At the corporate level, they focus on their vertically integrated product development and sales

business. Moreover, also focusing on related diversification to exploit low cost sources to create

more value and also coming up with solutions for small business.
STRENGHT AND WEEKNESS- MICRO
The key to Intuits success are its strength (EXHIBIT 4). However, the weaknesses need to keep

in consideration in the short run so that they don’t face problems in the long term. Intuits R&D,

reputation, diverse product offering, customer centric culture and resources leads to growth.

Working on the weaknesses like data quality, lack of expertise in the partner management,

looking into 3rd party and platform centric needs are to be taken in consideration to move

forward.

ALTERNATIVES
Few alternatives are available to Intuit, keeping all the external changes in mind.

1) Should the platform model be executed or should they just stick to product model

2) Building a model that respects both the product and platform model( hybrid)

3) Focus on platform model completely to gain competitive advantage

The first option is simply based on intuits reputation. Basically saying that they should be

exploiting their capabilities more and stick to the current product model instead of the platform

model. However, they are risking the fact of long term sustainable growth which could be turn

into threat by the competitors.

The second option is to avoid risk of failing. This would help to sell their current products and

keep stakeholders happy alongside building platform to gain long term sustainable competitive

advantage in the future.

The third options comes with a risk of failing but could leads to long term sustainable

competitive advantage faster than the second option.

They selections were all based on 4 criteria on (EXHIBIT 7) and option 2 was the best fit.

Recommendation
My recommendation would be to go with the second option, selling both the product and

working on the platform model at the same time. This basically reduces the risk of failing and it

would be on the best interest of the shareholders following their corporate strategy.

IMPLEMENTATION
Short run (0-6 months)-
Start a group that would help each other in designing the platform. The communication

would help decrease the weaknesses, as team work would lead to complete work. Moreover,

spread around the word of the hybrid model to all external partners (customer, employees, &

shareholders) to maintain transparency and building trust.

Medium term (6-12 months)-

Do beta testing and make sure that other platforms for SMB’s and third party platform are

working perfectly.

Long term (12months +)

Promoting the ease of use through marketing and adding new features to the platform. Also

selling specific information to companies and price should be based on the demand of it.
 CONCLUSION
Intuit has been a leader because of their customer centric approach to developing product and

continuous innovation in this fast changing market. As a result, they need stay true to their core

competencies and apply the hybrid model to gain long term sustainable competitive advantage.

1498 words (excluding headers and titles)

EXHIBITS 1- PEST ANALYSIS
Factor Characteristics
Political  Political factors doesn’t exist
Economic  Growth in small and medium sized business due to recovering recession.
 High interest on loans due to recession.
Social and  Social trends are decreasing communication gap. Social media and cell phones
Cultural made it easier. However, privacy is a concern
 Ease of use and user experience is very important when it comes to technology.

Technological  3rd party developers improves customer experience with the rise of network
 Cloud computing is the new trend in online software industry
 Integration of all devices due to cloud computing
Legal  Legality is key while dealing with information especially privates ones.

EXHIBIT 2- PORTERS FIVE FORCES

Force Threat Comments

Threat of High for  Technology trending towards platform business models and consumer
New product demand for these services makes the industry very attractive to new
Entrants entrants
Medium  Medium barriers to entry for platform. It can easily be developed by tech
for companies with large R&D budgets, but harder for small players to enter
platform the market
 Switching costs are not high but time consuming so new users might only
switch.
Suppliers’ Low for  High number of developers (IPP), leading to low power of supplier.
Power  QuickBooks financing is currently limited to a single supplier
both (Biz2Credit), gives them comparatively high bargaining power.
Buyers’ Medium  New products in the market gives buyer some power as they get some
Power for both options available.
 Buyer power is going be medium for platforms as SMB’s have other
platform options available to them.
Threat of High for
Substitutes product
 There are fewer substitutes for platform at the moment.
Medium  Intuit captures most of the market share in the product industry so if
for some customer wants to use 3rd party sources, Intuit will still benefit with
platform their big chunk of market share.
Rivalry Low for  Intuit is the market leader for the services it offers.
Among both  In platform model, there is even limited competition so the rivalry is even
Competitors lower.
EXHIBITS 3- INDUSTRY KEY SUCCESS FACTORS
Factor Characteristics
Comprehensive
& Innovative Comprehensive features are necessary to remain competitive and continuous
Product innovation to keep moving with the fast pace market.

3rd party 3rd parties would add expertise in the business to add more value in the business.
investment Thus, choosing right 3rd party is very important

Customer Keep end users in mind helps to cater product and service that specifically fulfill
focused their needs and adds value.

Investment in Always need to keep doing continuous innovation and R&D is must for adding
R&D value. Moreover, requires a skilled workforce, who could add sustainable
competitive advantage.

EXHIBITS 4 – SWOT ANALYSIS

Strengths: Weaknesses:

 Research and development  Limited internal resources

 Strong reputation  Lack of integration among internal divisions
 High skilled and knowledgeable work force  Product focused instead of platform centric
 Big product line.
Opportunities: Threats:
 Increased innovation leads to increase in  Competition is rising
customer centric approach  Market gap could be changed into threat by
competitors through innovation
 Trend is in cloud computing so digitizing task  Moving away from traditional products
would be a very smart move  People could copy data alongside the fear of
hackers who might try to steal data
 Usage of data they have and sell it as
information or acquire company that can make
it useful
EXHIBIT 5- RESOURCES
CATEGORY DESCRIPTION
Tangible
Financial Graph shows that the market price of Intuit stock is going up. The revenue and
Resources growth margin from the past years shows that they are manipulating cost very
well. Moreover, they also have market capitalization of $19 billion.

Organizational They have 8500 employees working for them divided into 4 segment.
Resources Moreover, organized in silo and solving individual problems. They have strong
communication and feedback process to be customer focused and minimize the
weaknesses.
Physical Beside access to servers running cloud services, Intuit also acquired few
Resources companies like Turbo tax and Mint. In addition, they also sell financial
supplies.
Technological Their biggest strength is analyzing customer data well and turning them into
Resources customer centric product. Moreover making user friendly product that would
be hard to copy by competitors because of legal issues of rights.

Intangible
Human Highly knowledgeable and skill labour force who are future oriented when it
Resources comes to innovation and very customer focused to add as much value as
possible.
Innovation Using customer feedback to develop product. Moreover, numerous products
Resources and service are on the verge of being developed (ex-IPP, Concierge.)

Reputational Intuit is the market leader in selling financial and business solutions to SMB’s
Resources and accounting professionals. This value leads to trust which is a very
important component of any business.
Exhibit 6 – VRIN ANALYSIS
Valuable? Rare? Costly to Non- Competitive Performance
Imitate? Substitutable? Consequences Implications

Product Development (R&D)

Yes No YES, Yes [no Temporary Average returns
high cost substitute to competitive
of R&D building great advantage
products and
platform

Human Resources
Yes Yes (Top talents Yes Yes [it can be Sustainable Above average
are hard to recruit outsourced for competitive returns
and find ) cheaper but the advantage
quality wouldn’t
be the same

Customer Relations
Yes Yes (but becomes No Yes Temporary Average returns
less and less as competitive
competitors see advantage
the value of
customer-centric
approaches]
EXHIBITS 7 – DECISION MATRIX

Product
Focus Platform-focus Product+Platform
focused

Long Term
3 5 2
PROFITABILITY

Leveraging Core
3 3 4
Competencies

Availability of
5 5 3
Resources

Strategic
2 3 4
Fit

TOTAL 13 16 13

INTUIT
THE GREATER THE SCORES, the more favorable
It is to make the move. Platform-
focused

DATA SMB GOOGLE AD

Focus Data
SELLING SPENDING WORDS
selling
Customer Trust 4 4 2

Profitability 3 2 2 SMB
Strategic Fit 2 3 1
spending

TOTAL 9 9 5 Google
adwords
model