Supply Chain Outsourcing at DB Toys SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Supply Chain Outsourcing at DB Toys
The case is based on a real supply chain outsourcing management decision at a major manufacturing company. The company has been disguised for confidentiality reasons. The case discusses different types of outsourcing, supply chain management, the benefits and risks of outsourcing, and various pricing models for outsourcing contracts. Students must make a management decision and answer these questions: Is supply chain outsourcing a viable option for DB Toys? What will the return on investment be? What is the best outsourcing model? What is the best pricing model?
Authors :: Mark Jeffery, David Bibbs, Michael Dowhan, Daniel Grace
Swot Analysis of "Supply Chain Outsourcing at DB Toys" written by Mark Jeffery, David Bibbs, Michael Dowhan, Daniel Grace includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Outsourcing Db facing as an external strategic factors. Some of the topics covered in Supply Chain Outsourcing at DB Toys case study are - Strategic Management Strategies, Financial management, Pricing, Strategy, Supply chain, Technology and Organizational Development.
Some of the macro environment factors that can be used to understand the Supply Chain Outsourcing at DB Toys casestudy better are - – central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Supply Chain Outsourcing at DB Toys
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Supply Chain Outsourcing at DB Toys case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Outsourcing Db, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Outsourcing Db 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 Supply Chain Outsourcing at DB Toys can be done for the following purposes –
1. Strategic planning using facts provided in Supply Chain Outsourcing at DB Toys case study
2. Improving business portfolio management of Outsourcing Db
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 Outsourcing Db
Strengths Supply Chain Outsourcing at DB Toys | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Outsourcing Db in Supply Chain Outsourcing at DB Toys Harvard Business Review case study are -
Highly skilled collaborators
– Outsourcing Db 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 Supply Chain Outsourcing at DB Toys 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 Outsourcing Db in the sector have low bargaining power. Supply Chain Outsourcing at DB Toys has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Outsourcing Db to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Organizational Development industry
– Supply Chain Outsourcing at DB Toys firm has clearly differentiated products in the market place. This has enabled Outsourcing Db to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Outsourcing Db to invest into research and development (R&D) and innovation.
Organizational Resilience of Outsourcing Db
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Outsourcing Db does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Outsourcing Db has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Supply Chain Outsourcing at DB Toys Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Outsourcing Db are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Organizational Development field
– Outsourcing Db 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 Outsourcing Db in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Outsourcing Db 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 Mark Jeffery, David Bibbs, Michael Dowhan, Daniel Grace 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.
High switching costs
– The high switching costs that Outsourcing Db 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.
Successful track record of launching new products
– Outsourcing Db has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Outsourcing Db 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.
Innovation driven organization
– Outsourcing Db is one of the most innovative firm in sector. Manager in Supply Chain Outsourcing at DB Toys Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Outsourcing Db in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Supply Chain Outsourcing at DB Toys | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Supply Chain Outsourcing at DB Toys are -
High bargaining power of channel partners
– Because of the regulatory requirements, Mark Jeffery, David Bibbs, Michael Dowhan, Daniel Grace suggests that, Outsourcing Db 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.
Products dominated business model
– Even though Outsourcing Db 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 - Supply Chain Outsourcing at DB Toys should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Outsourcing Db 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. Outsourcing Db 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Supply Chain Outsourcing at DB Toys, in the dynamic environment Outsourcing Db has struggled to respond to the nimble upstart competition. Outsourcing Db has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Supply Chain Outsourcing at DB Toys HBR case study mentions - Outsourcing Db takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Outsourcing Db products
– To increase the profitability and margins on the products, Outsourcing Db needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Supply Chain Outsourcing at DB Toys, it seems that the employees of Outsourcing Db 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.
Skills based hiring
– The stress on hiring functional specialists at Outsourcing Db has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Outsourcing Db 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 Supply Chain Outsourcing at DB Toys 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 Outsourcing Db 's lucrative customers.
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 Outsourcing Db supply chain. Even after few cautionary changes mentioned in the HBR case study - Supply Chain Outsourcing at DB Toys, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Outsourcing Db vulnerable to further global disruptions in South East Asia.
Opportunities Supply Chain Outsourcing at DB Toys | 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 Supply Chain Outsourcing at DB Toys are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Outsourcing Db 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.
Buying journey improvements
– Outsourcing Db can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Supply Chain Outsourcing at DB Toys 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.
Using analytics as competitive advantage
– Outsourcing Db 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 Supply Chain Outsourcing at DB Toys - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Outsourcing Db to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Outsourcing Db to increase its market reach. Outsourcing Db 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.
Developing new processes and practices
– Outsourcing Db 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.
Leveraging digital technologies
– Outsourcing Db 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Outsourcing Db can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Outsourcing Db in the consumer business. Now Outsourcing Db can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Outsourcing Db can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Outsourcing Db can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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. Outsourcing Db can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Outsourcing Db has opened avenues for new revenue streams for the organization in the industry. This can help Outsourcing Db to build a more holistic ecosystem as suggested in the Supply Chain Outsourcing at DB Toys case study. Outsourcing Db can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Outsourcing Db is facing challenges because of the dominance of functional experts in the organization. Supply Chain Outsourcing at DB Toys 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Outsourcing Db can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Supply Chain Outsourcing at DB Toys, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Supply Chain Outsourcing at DB Toys External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Supply Chain Outsourcing at DB Toys are -
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. Outsourcing Db 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.
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 Outsourcing Db.
High dependence on third party suppliers
– Outsourcing Db 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.
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 Outsourcing Db in the Organizational Development sector and impact the bottomline of the organization.
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 Outsourcing Db business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Outsourcing Db is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Outsourcing Db has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Outsourcing Db 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Outsourcing Db with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Outsourcing Db in the Organizational Development industry. The Organizational Development 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.
Environmental challenges
– Outsourcing Db 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. Outsourcing Db can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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. Outsourcing Db can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Outsourcing Db can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Outsourcing Db 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.
Weighted SWOT Analysis of Supply Chain Outsourcing at DB Toys 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 Supply Chain Outsourcing at DB Toys 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 Supply Chain Outsourcing at DB Toys 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 Supply Chain Outsourcing at DB Toys 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 Supply Chain Outsourcing at DB Toys 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 Outsourcing Db needs to make to build a sustainable competitive advantage.
