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 - – wage bills are increasing, increasing commodity prices, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, 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 -
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Planit Living 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.
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.
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.
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.
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 -
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert G. Eccles, Amy C. Edmondson, Susan Thyne, Tiona Zuzul suggests that, Planit Living 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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Living PlanIT 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 Planit Living 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Living PlanIT, in the dynamic environment Planit Living has struggled to respond to the nimble upstart competition. Planit Living has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Planit Living supply chain. Even after few cautionary changes mentioned in the HBR case study - Living PlanIT, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Planit Living vulnerable to further global disruptions in South East Asia.
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.
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.
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 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.
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.
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 -
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.
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.
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.
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.
Building a culture of innovation
– managers at Planit Living 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 Organizational Development segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Planit Living is facing challenges because of the dominance of functional experts in the organization. Living PlanIT 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.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Planit Living can use these opportunities to build new business models that can help the communities that Planit Living operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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 Planit Living 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.
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.
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 -
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Planit Living with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 .
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.
Regulatory challenges
– Planit Living needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
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.
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.
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.
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.