Case Study Description of IDEO: Human-Centered Service Design
This case study includes mandatory video elements, which are integrated into the pre-class assignment for students and the classroom teaching plan for instructors. Information on how to access and use these multimedia components is included in the Teaching Note.The case describes IDEO, one of the world's leading design firms, and its human-centered innovation culture and processes. It is an example of what managers can do to make their own organizations more innovative. In reaction to a rapidly changing competitive landscape, a team of IDEO designers have been hired by Cineplanet, the leading movie cinema chain in Peru, to reinvent the movie-going experience for Peruvians. Cineplanet wishes to better align their operating model with the needs and behaviors of its customers.
Swot Analysis of "IDEO: Human-Centered Service Design" written by Ryan W. Buell, Andrew Otazo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ideo Cineplanet facing as an external strategic factors. Some of the topics covered in IDEO: Human-Centered Service Design case study are - Strategic Management Strategies, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the IDEO: Human-Centered Service Design casestudy better are - – wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing household debt because of falling income levels,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of IDEO: Human-Centered Service Design
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in IDEO: Human-Centered Service Design case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ideo Cineplanet, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ideo Cineplanet operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of IDEO: Human-Centered Service Design can be done for the following purposes –
1. Strategic planning using facts provided in IDEO: Human-Centered Service Design case study
2. Improving business portfolio management of Ideo Cineplanet
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ideo Cineplanet
Strengths IDEO: Human-Centered Service Design | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ideo Cineplanet in IDEO: Human-Centered Service Design Harvard Business Review case study are -
Ability to recruit top talent
– Ideo Cineplanet is one of the leading recruiters in the industry. Managers in the IDEO: Human-Centered Service Design are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Ideo Cineplanet is present in almost all the verticals within the industry. This has provided firm in IDEO: Human-Centered Service Design case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Innovation driven organization
– Ideo Cineplanet is one of the most innovative firm in sector. Manager in IDEO: Human-Centered Service Design Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Ideo Cineplanet has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ideo Cineplanet to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Leadership & Managing People field
– Ideo Cineplanet is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ideo Cineplanet in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Ideo Cineplanet is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ryan W. Buell, Andrew Otazo can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Leadership & Managing People industry
– IDEO: Human-Centered Service Design firm has clearly differentiated products in the market place. This has enabled Ideo Cineplanet to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ideo Cineplanet to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Ideo Cineplanet has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ideo Cineplanet has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Organizational Resilience of Ideo Cineplanet
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ideo Cineplanet does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the IDEO: Human-Centered Service Design Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Ideo Cineplanet has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study IDEO: Human-Centered Service Design - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Ideo Cineplanet is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ideo Cineplanet is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in IDEO: Human-Centered Service Design Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses IDEO: Human-Centered Service Design | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of IDEO: Human-Centered Service Design are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ideo Cineplanet supply chain. Even after few cautionary changes mentioned in the HBR case study - IDEO: Human-Centered Service Design, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ideo Cineplanet vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study IDEO: Human-Centered Service Design that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case IDEO: Human-Centered Service Design can leverage the sales team experience to cultivate customer relationships as Ideo Cineplanet is planning to shift buying processes online.
Lack of clear differentiation of Ideo Cineplanet products
– To increase the profitability and margins on the products, Ideo Cineplanet needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Ideo Cineplanet has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ideo Cineplanet even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the IDEO: Human-Centered Service Design HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ideo Cineplanet has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Ryan W. Buell, Andrew Otazo suggests that, Ideo Cineplanet is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Ideo Cineplanet has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, firm in the HBR case study IDEO: Human-Centered Service Design has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ideo Cineplanet 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study IDEO: Human-Centered Service Design, it seems that the employees of Ideo Cineplanet don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Products dominated business model
– Even though Ideo Cineplanet has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - IDEO: Human-Centered Service Design should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study IDEO: Human-Centered Service Design, is just above the industry average. Ideo Cineplanet needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities IDEO: Human-Centered Service Design | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study IDEO: Human-Centered Service Design are -
Building a culture of innovation
– managers at Ideo Cineplanet can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ideo Cineplanet in the consumer business. Now Ideo Cineplanet can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Ideo Cineplanet to increase its market reach. Ideo Cineplanet will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Creating value in data economy
– The success of analytics program of Ideo Cineplanet has opened avenues for new revenue streams for the organization in the industry. This can help Ideo Cineplanet to build a more holistic ecosystem as suggested in the IDEO: Human-Centered Service Design case study. Ideo Cineplanet can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Ideo Cineplanet can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ideo Cineplanet to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ideo Cineplanet to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ideo Cineplanet can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ideo Cineplanet can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ideo Cineplanet to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Ideo Cineplanet can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ideo Cineplanet can use these opportunities to build new business models that can help the communities that Ideo Cineplanet operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ideo Cineplanet is facing challenges because of the dominance of functional experts in the organization. IDEO: Human-Centered Service Design case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Ideo Cineplanet to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats IDEO: Human-Centered Service Design External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study IDEO: Human-Centered Service Design are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study IDEO: Human-Centered Service Design, Ideo Cineplanet may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Increasing wage structure of Ideo Cineplanet
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Ideo Cineplanet.
Shortening product life cycle
– it is one of the major threat that Ideo Cineplanet is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Ideo Cineplanet has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ideo Cineplanet needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ideo Cineplanet.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ideo Cineplanet will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ideo Cineplanet in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ideo Cineplanet in the Leadership & Managing People sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Ideo Cineplanet needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ideo Cineplanet can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Ideo Cineplanet needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ideo Cineplanet can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of IDEO: Human-Centered Service Design Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study IDEO: Human-Centered Service Design needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study IDEO: Human-Centered Service Design is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study IDEO: Human-Centered Service Design is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of IDEO: Human-Centered Service Design is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ideo Cineplanet needs to make to build a sustainable competitive advantage.
