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 - – talent flight as more people leaving formal jobs, wage bills are increasing, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, 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 -
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.
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.
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.
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.
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.
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.
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.
Innovation driven organization
– Planit Living is one of the most innovative firm in sector. Manager in Living PlanIT Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Planit Living is one of the leading recruiters in the industry. Managers in the Living PlanIT are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Planit Living has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Living PlanIT 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Planit Living digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Planit Living has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Planit Living is present in almost all the verticals within the industry. This has provided firm in Living PlanIT 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.
Weaknesses Living PlanIT | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Living PlanIT are -
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.
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.
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.
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.
Products dominated business model
– Even though Planit Living 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 - Living PlanIT should strive to include more intangible value offerings along with its core products and services.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Living PlanIT, it seems that the employees of Planit Living 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.
Need for greater diversity
– Planit Living has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Slow to strategic competitive environment developments
– As Living PlanIT HBR case study mentions - Planit Living 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Living PlanIT, is just above the industry average. Planit Living 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 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.
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.
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.
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.
Manufacturing automation
– Planit Living can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
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.
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.
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.
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.
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.
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. Planit Living 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. Planit Living 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.
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.
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 -
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.
Stagnating economy with rate increase
– Planit Living 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Planit Living 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.
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 .
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.
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.
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.
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 .
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. Planit Living 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.
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.
Environmental challenges
– Planit Living 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. Planit Living can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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.
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.
