Living PlanIT is a start-up company that has developed a new, innovative business model for sustainable urbanization. This model reflects the software and technology backgrounds of its founders, Steve Lewis and Malcolm Hutchinson, and is in vivid contrast to other models for green or smart cities that are variations on a massive real estate development project. The main economic engine driving Living PlanIT's model is a partner channel strategy adopted from the high technology industry. The case shows how the Living PlanIT business model has evolved from the original vision of Lewis and Hutchinson to radically transform the construction industry to a go-to-market partnership model using the real estate as a "showroom" for evolving sustainable urban technology--a $3 trillion global market over the next 20 years. Living PlanIT is developing its first project, a new city called PlanIT Valley, outside of Porto, Portugal. The company has clarified its vision and is moving into the implementation phase, which involves fundraising, signing up channel partners, and negotiating various issues with the Portuguese government for its pilot project. Success in PlanIT Valley will translate into a strong market position as global population and demand for new cities increases, particularly in developing countries such as China and India. Topics Include: Urban Development, Economic Development, Business Models, Technological Innovation, Construction Industry, Real Estate, High Technology Products, and Entrepreneurship.
Authors :: Robert G. Eccles, Amy C. Edmondson, Susan Thyne, Tiona Zuzul
Swot Analysis of "Living PlanIT" written by Robert G. Eccles, Amy C. Edmondson, Susan Thyne, Tiona Zuzul includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Planit Living facing as an external strategic factors. Some of the topics covered in Living PlanIT case study are - Strategic Management Strategies, Economic development, Entrepreneurship, Organizational culture, Policy and Organizational Development.
Some of the macro environment factors that can be used to understand the Living PlanIT casestudy better are - – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing commodity prices, geopolitical disruptions, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings,
cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Living PlanIT case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Planit Living, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Planit Living 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 Living PlanIT can be done for the following purposes –
1. Strategic planning using facts provided in Living PlanIT case study
2. Improving business portfolio management of Planit Living
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Planit Living
Strengths Living PlanIT | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Planit Living in Living PlanIT Harvard Business Review case study are -
Learning organization
- Planit Living 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 Planit Living is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Living PlanIT Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Planit Living has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Planit Living to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Living PlanIT 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.
Successful track record of launching new products
– Planit Living has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Planit Living 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 Planit Living
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Planit Living does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Organizational Development field
– Planit Living 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 Planit Living in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Planit Living in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Planit Living is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Planit Living 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 Living PlanIT - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Planit Living has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Planit Living has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Living PlanIT HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Planit Living in the sector have low bargaining power. Living PlanIT has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Planit Living to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Living PlanIT | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Living PlanIT are -
Interest costs
– Compare to the competition, Planit Living 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.
Slow decision making process
– As mentioned earlier in the report, Planit Living 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. Planit Living 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.
Increasing silos among functional specialists
– The organizational structure of Planit Living is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Planit Living needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Planit Living to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Planit Living is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Living PlanIT can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Living PlanIT 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 Living PlanIT can leverage the sales team experience to cultivate customer relationships as Planit Living is planning to shift buying processes online.
High cash cycle compare to competitors
Planit Living has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Living PlanIT, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Planit Living products
– To increase the profitability and margins on the products, Planit Living needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Planit Living, firm in the HBR case study Living PlanIT needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Planit Living needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Living PlanIT 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 Planit Living has relatively successful track record of launching new products.
Opportunities Living PlanIT | 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 Living PlanIT are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Planit Living 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.
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 Planit Living in the consumer business. Now Planit Living can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Planit Living can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Living PlanIT suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Planit Living can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Planit Living 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Planit Living can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Planit Living in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Planit Living has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Living PlanIT - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Planit Living to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Planit Living can develop new processes and procedures in Organizational Development 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Planit Living can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Planit Living has opened avenues for new revenue streams for the organization in the industry. This can help Planit Living to build a more holistic ecosystem as suggested in the Living PlanIT case study. Planit Living can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Planit Living can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Planit Living to increase its market reach. Planit Living 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.
Threats Living PlanIT External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Living PlanIT are -
Increasing wage structure of Planit Living
– 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 Planit Living.
Shortening product life cycle
– it is one of the major threat that Planit Living is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Planit Living in the Organizational Development sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Planit Living has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Planit Living needs to keep up with the evolution of technology in the Organizational Development 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Planit Living can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Living PlanIT .
High dependence on third party suppliers
– Planit Living high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Living PlanIT, Planit Living may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Planit Living can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Planit Living business can come under increasing regulations regarding data privacy, data security, etc.
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. Planit Living needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Consumer confidence and its impact on Planit Living demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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 Planit Living.
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.
Weighted SWOT Analysis of Living PlanIT 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 Living PlanIT 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 Living PlanIT 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 Living PlanIT 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 Living PlanIT 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 Planit Living needs to make to build a sustainable competitive advantage.