Case Study Description of Digital Communications, Inc.: Encoder Device Division
Explores the issues surrounding the determination of the product cost of a subassembly in a firm that has never had to determine subassembly costs. Asks students to change the cost system by adding allocation bases and developing a step-down allocation process.
Swot Analysis of "Digital Communications, Inc.: Encoder Device Division" written by Robin Cooper, Shannon Weems includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Subassembly Encoder facing as an external strategic factors. Some of the topics covered in Digital Communications, Inc.: Encoder Device Division case study are - Strategic Management Strategies, Costs, Manufacturing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Digital Communications, Inc.: Encoder Device Division casestudy better are - – supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, there is increasing trade war between United States & China,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Digital Communications, Inc.: Encoder Device Division
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Digital Communications, Inc.: Encoder Device Division case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Subassembly Encoder, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Subassembly Encoder 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 Digital Communications, Inc.: Encoder Device Division can be done for the following purposes –
1. Strategic planning using facts provided in Digital Communications, Inc.: Encoder Device Division case study
2. Improving business portfolio management of Subassembly Encoder
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Subassembly Encoder
Strengths Digital Communications, Inc.: Encoder Device Division | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Subassembly Encoder in Digital Communications, Inc.: Encoder Device Division Harvard Business Review case study are -
Highly skilled collaborators
– Subassembly Encoder 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 Digital Communications, Inc.: Encoder Device Division HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Subassembly Encoder digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Subassembly Encoder 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.
Learning organization
- Subassembly Encoder 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 Subassembly Encoder is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Digital Communications, Inc.: Encoder Device Division Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Digital Communications, Inc.: Encoder Device Division 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
– Subassembly Encoder has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Subassembly Encoder 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.
Low bargaining power of suppliers
– Suppliers of Subassembly Encoder in the sector have low bargaining power. Digital Communications, Inc.: Encoder Device Division has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Subassembly Encoder to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Subassembly Encoder is present in almost all the verticals within the industry. This has provided firm in Digital Communications, Inc.: Encoder Device Division 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.
Effective Research and Development (R&D)
– Subassembly Encoder 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 Digital Communications, Inc.: Encoder Device Division - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Finance & Accounting industry
– Digital Communications, Inc.: Encoder Device Division firm has clearly differentiated products in the market place. This has enabled Subassembly Encoder to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Subassembly Encoder to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Subassembly Encoder in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Subassembly Encoder is one of the most innovative firm in sector. Manager in Digital Communications, Inc.: Encoder Device Division 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
– Subassembly Encoder has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Digital Communications, Inc.: Encoder Device Division 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.
Weaknesses Digital Communications, Inc.: Encoder Device Division | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Digital Communications, Inc.: Encoder Device Division are -
Need for greater diversity
– Subassembly Encoder 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.
High cash cycle compare to competitors
Subassembly Encoder 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.
Increasing silos among functional specialists
– The organizational structure of Subassembly Encoder is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Subassembly Encoder needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Subassembly Encoder to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Subassembly Encoder 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 bargaining power of channel partners
– Because of the regulatory requirements, Robin Cooper, Shannon Weems suggests that, Subassembly Encoder 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Subassembly Encoder is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Digital Communications, Inc.: Encoder Device Division 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 operating costs
– Compare to the competitors, firm in the HBR case study Digital Communications, Inc.: Encoder Device Division 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 Subassembly Encoder 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Subassembly Encoder, firm in the HBR case study Digital Communications, Inc.: Encoder Device Division needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Subassembly Encoder products
– To increase the profitability and margins on the products, Subassembly Encoder needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Digital Communications, Inc.: Encoder Device Division 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 Digital Communications, Inc.: Encoder Device Division can leverage the sales team experience to cultivate customer relationships as Subassembly Encoder is planning to shift buying processes online.
Products dominated business model
– Even though Subassembly Encoder 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 - Digital Communications, Inc.: Encoder Device Division should strive to include more intangible value offerings along with its core products and services.
Opportunities Digital Communications, Inc.: Encoder Device Division | 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 Digital Communications, Inc.: Encoder Device Division are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Subassembly Encoder can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Subassembly Encoder 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 Digital Communications, Inc.: Encoder Device Division - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Subassembly Encoder to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Subassembly Encoder can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Subassembly Encoder 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Subassembly Encoder is facing challenges because of the dominance of functional experts in the organization. Digital Communications, Inc.: Encoder Device Division 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Subassembly Encoder can use these opportunities to build new business models that can help the communities that Subassembly Encoder operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Subassembly Encoder to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Subassembly Encoder to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Subassembly Encoder can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Leveraging digital technologies
– Subassembly Encoder 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 Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Subassembly Encoder 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. Subassembly Encoder 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Subassembly Encoder can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Subassembly Encoder can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Digital Communications, Inc.: Encoder Device Division 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.
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 Subassembly Encoder in the consumer business. Now Subassembly Encoder can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Digital Communications, Inc.: Encoder Device Division External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Digital Communications, Inc.: Encoder Device Division are -
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 Subassembly Encoder business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Subassembly Encoder 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. Subassembly Encoder can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Technology acceleration in Forth Industrial Revolution
– Subassembly Encoder has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Subassembly Encoder needs to keep up with the evolution of technology in the Finance & Accounting 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Subassembly Encoder 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
– Subassembly Encoder 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.
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. Subassembly Encoder needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Subassembly Encoder 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Subassembly Encoder in the Finance & Accounting industry. The Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Subassembly Encoder with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Subassembly Encoder 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.
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. Subassembly Encoder 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Digital Communications, Inc.: Encoder Device Division, Subassembly Encoder may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Weighted SWOT Analysis of Digital Communications, Inc.: Encoder Device Division 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 Digital Communications, Inc.: Encoder Device Division 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 Digital Communications, Inc.: Encoder Device Division 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 Digital Communications, Inc.: Encoder Device Division 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 Digital Communications, Inc.: Encoder Device Division 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 Subassembly Encoder needs to make to build a sustainable competitive advantage.
