Case Description of Dovernet Case Study

This case illustrates the implications of using stringent performance measurement

systems to create performance pressure, motivate employee achievement, and
sharpen a firm's competitiveness. It opens by describing the downsides of the
ruthlessly competitive culture at Zynga, a young, successful online gaming company.
A similar data-driven performance measurement system is employed at Dovernet, a
Vancouver-based provider of enterprise communications and social-networking
technologies. Dovernet's founder and CEO sees performance measurement systems
as vital for cultivating the competitive, innovative workforce necessary for Dovernet
to win in a fiercely competitive industry. Dovernet uses quarterly top-down reviews
and stack ranking (with major implications for bonuses), as well as bottom-up
reviews, to reward top achievers and put low performers on notice. The practical
challenges of applying this system are illustrated in three brief vignettes. In the first
two, students can assume the role of a manager charged with interpreting and acting
on the negative reviews given to two employees with unique (but are they
mitigating?) personal circumstances. The third vignette puts students in the role of
an employee conducting a bottom-up review, as he struggles to balance honesty
with the potential repercussions of giving his manager less-than-perfect feedback.
The case allows students to consider the benefits and risks of different performance
evaluation strategies and their implications for a firm's performance, culture, and
employee morale. Are there certain types of firms or industries for which such
systems are more appropriate? Do the integrity and effectiveness of a performance
measurement system depend on managers' applying cold objectivity, or is there
room for flexibility? In highly competitive industries, can firms lacking a strong
performance emphasis beat competitors like Dovernet and Zynga?

Case Authors : Robert L. Simons, Natalie Kindred

Topic : Finance & Accounting

Related Areas : Assessing performance, Compensation, Competitive strategy, Corporate governance,

Decision making, Human resource management, IT, Leadership, Motivating people, Organizational
culture, Performance measurement
What is the Case Study Method ? How can you use it to
write case solution for Dovernet case study?

Almost all of the case studies contain well defined situations. MBA and EMBA
professional can take advantage of these situations to - apply theoretical framework,
recommend new processes, and use quantitative methods to suggest course of
action.

Awareness of the common situations can help MBA & EMBA professionals read the
case study more efficiently, discuss it more effectively among the team members,
narrow down the options, and write cogently.

Case Study Solution Approaches

Three Step Approach to Dovernet Case Study Solution

The three step case study solution approach comprises –

Conclusions – MBA & EMBA professionals should state their conclusions at the very
start. It helps in communicating the points directly and the direction one took.

Reasons – At the second stage provide the reasons for the conclusions. Why you
choose one course of action over the other. For example why the change effort failed
in the case and what can be done to rectify it. Or how the marketing budget can be
better spent using social media rather than traditional media.

Evidences – Finally you should provide evidences to support your reasons. It has to
come from the data provided within the case study rather than data from outside
world. Evidences should be both compelling and consistent. In case study method
there is ‘no right’ answer, just how effectively you analyzed the situation based on
incomplete information and multiple scenarios.
Case Study Solution of Dovernet

We write Dovernet case study solution using Harvard Business Review case writing
framework & HBR Finance & Accounting learning notes. We try to cover all the bases
in the field of Finance & Accounting, Assessing performance, Compensation,
Competitive strategy, Corporate governance, Decision making, Human resource
management, IT, Leadership, Motivating people, Organizational culture, Performance
measurement and other related areas.

Objectives of using various frameworks in Dovernet case

study solution

By using the above frameworks for Dovernet case study solutions, you can clearly
draw conclusions on the following areas –

What are the strength and weaknesses of Dovernet Performance (SWOT Analysis)

What are external factors that are impacting the business environment (PESTEL
Analysis)

Should Dovernet Performance enter new market or launch new

product (Opportunities & Threats from SWOT Analysis)

What will be the expected profitability of the new products or services (Porter Five
Forces Analysis)

How it can improve the profitability in a given industry (Porter Value Chain

Analysis)

What are the resources needed to increase profitability (VRIO Analysis)

Finally which business to continue, where to invest further and from which to get
out (BCG Growth Share Analysis)
SWOT Analysis of Dovernet

SWOT analysis stands for – Strengths, Weaknesses, Opportunities and Threats.

Strengths and Weaknesses are result of Dovernet Performance internal factors, while
opportunities and threats arise from developments in external environment in which
Dovernet Performance operates. SWOT analysis will help us in not only getting a
better insight into Dovernet Performance present competitive advantage but also
help us in how things have to evolve to maintain and consolidate the competitive
advantage.

Strengths

- Experienced and successful leadership team – Dovernet Performance management

team has been a success over last decade by successfully predicting trends in the
industry.

- High customer loyalty & repeat purchase among existing customers – Dovernet
Performance old customers are still loyal to the firm even though it has limited
success with millennial. I believe that Dovernet Performance can make a transition
even by keeping these people on board.

Weakness

- Dovernet Performance business model can be easily replicated by competitors –

According to Robert L. Simons, Natalie Kindred , the business model of Dovernet
Performance can be easily replicated by players in the industry.

- Low profitability which can hamper new project investment – Even though
Dovernet Performance financial statement is stable, but going forward Dovernet
Performance 5-7% profitability can lead to shortage of funds to invest into new
projects.

Opportunities
- Lucrative Opportunities in International Markets – Globalization has led to
opportunities in the international market. Dovernet Performance is in prime position
to tap on those opportunities and grow the market share.

- Increase in Consumer Disposable Income – Dovernet Performance can use the

increasing disposable income to build a new business model where customers start
paying progressively for using its products. According to Robert L. Simons, Natalie
Kindred of Dovernet case study, Dovernet Performance can use this trend to expand
in adjacent areas Assessing performance, Compensation, Competitive strategy,
Corporate governance, Decision making, Human resource management, IT,
Leadership, Motivating people, Organizational culture, Performance measurement.

Threats

- Age and life-cycle segmentation of Dovernet Performance shows that the company
still hasn’t able to penetrate the millennial market.

- Customers are moving toward mobile first environment which can hamper the
growth as Dovernet Performance still hasn’t got a comprehensive mobile strategy.

Once all the factors mentioned in the Dovernet case study are organized based on
SWOT analysis, just remove the non essential factors. This will help you in building a
weighted SWOT analysis which reflects the real importance of factors rather than just
tabulation of all the factors mentioned in the case.

What is PESTEL Analysis

PESTEL /PEST / STEP Analysis of Dovernet Case Study

PESTEL stands for – Political, Economic, Social, Technological, Environmental, and

Legal factors that impact the macro environment in which Dovernet Performance
operates in. Robert L. Simons, Natalie Kindred provides extensive information about
PESTEL factors in Dovernet case study.
Political Factors

- Political consensus among various parties regarding taxation rate and investment
policies. Over the years the country has progressively worked to lower the entry of
barrier and streamline the tax structure.

- Political and Legal Structure – The political system seems stable and there is
consistency in both economic policies and foreign policies.

Economic Factors

- Inflation rate is one of the key criteria to consider for Dovernet Performance before
entering into a new market.

- Foreign Exchange movement is also an indicator of economic stability. Dovernet

Performance should closely consider the forex inflow and outflow. A number of
Dovernet Performance competitors have lost money in countries such as Brazil,
Argentina, and Venezuela due to volatile forex market.

Social Factors

- Demographic shifts in the economy are also a good social indicator for Dovernet
Performance to predict not only overall trend in market but also demand for
Dovernet Performance product among its core customer segments.

- Consumer buying behavior and consumer buying process – Dovernet Performance

should closely follow the dynamics of why and how the consumers are buying the
products both in existing categories and in segments that Dovernet Performance
wants to enter.

Technological Factors

- Proliferation of mobile phones has created a generation whose primary tool of

entertainment and information consumption is mobile phone. Dovernet Performance
needs to adjust its marketing strategy accordingly.
- 5G has potential to transform the business environment especially in terms of
marketing and promotion for Dovernet Performance.

Environmental Factors

- Environmental regulations can impact the cost structure of Dovernet Performance.

It can further impact the cost of doing business in certain markets.

- Consumer activism is significantly impacting Dovernet Performance branding,

marketing and corporate social responsibility (CSR) initiatives.

Legal Factors

- Property rights are also an area of concern for Dovernet Performance as it needs to
make significant Assessing performance, Compensation, Competitive strategy,
Corporate governance, Decision making, Human resource management, IT,
Leadership, Motivating people, Organizational culture, Performance measurement
infrastructure investment just to enter new market.

- Intellectual property rights are one area where Dovernet Performance can face legal
threats in some of the markets it is operating in.

What are Porter Five Forces

Porter Five Forces Analysis of Dovernet

You can use Porter Five Forces to analyze the industry in which Dovernet
Performance operates in and what are the levers of profitability in those segments –
differentiation, Assessing performance, Compensation, Competitive strategy,
Corporate governance, Decision making, Human resource management, IT,
Leadership, Motivating people, Organizational culture, Performance measurement.
Michael Porter Five Forces of Strategy are –

Competition among existing players,

Bargaining power of suppliers,

Bargaining power of buyers,

Threat of new entrants, and

Threat of substitutes

Porter Five Forces can help in answering following questions for writing case study
solution for Dovernet -

How attractive is the industry described in the Dovernet?

Are some segments more attractive than others? Why? Identify, analyze, and
evaluate the strategy of the Dovernet Performance featured in the Dovernet case
study.

What are the pros and Cons of each strategy? What impact Dovernet Performance
actions will have on industry and economy on whole?