Case Study Description of Forus Health: Crossing the Disruptive Product Chasm
In April 2013, the co-founder and chief executive officer of Forus Health Private Limited sat in his office in Bangalore, India contemplating the future direction of his company. He was under pressure by his venture capital partner to rapidly penetrate the market for 3nethra - an innovative, multi-functional and low-cost ophthalmology device - before imitators stepped in. Given its features and advantages over expensive imported specialized tools, 3nethra could help address the huge challenge of preventable blindness in India, but after three years since inception, only 100 devices had been sold. Although the market opportunity was large, acceptance by the ophthalmology profession was key to gaining momentum. He had two choices: to maximize sales numbers through the scattergun tactic of going all out and all over the market or to build a sufficient base of positive word of mouth to gain the momentum necessary to pole-vault from the early to the mainstream market. How should he direct his sales team to take the company forward? Ramesh Narasimhan is affiliated with Narsee Monjee Institute of Management Studies (NMIMS). Nattuvathuckal Barnabas is affiliated with SVKM'S NMINMS University.
Swot Analysis of "Forus Health: Crossing the Disruptive Product Chasm" written by Ramesh Narasimhan, M.V. Ravikumar, Nattuvathuckal Barnabas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that 3nethra Forus facing as an external strategic factors. Some of the topics covered in Forus Health: Crossing the Disruptive Product Chasm case study are - Strategic Management Strategies, Technology and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Forus Health: Crossing the Disruptive Product Chasm casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , technology disruption, etc
Introduction to SWOT Analysis of Forus Health: Crossing the Disruptive Product Chasm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Forus Health: Crossing the Disruptive Product Chasm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the 3nethra Forus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which 3nethra Forus 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 Forus Health: Crossing the Disruptive Product Chasm can be done for the following purposes –
1. Strategic planning using facts provided in Forus Health: Crossing the Disruptive Product Chasm case study
2. Improving business portfolio management of 3nethra Forus
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of 3nethra Forus
Strengths Forus Health: Crossing the Disruptive Product Chasm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of 3nethra Forus in Forus Health: Crossing the Disruptive Product Chasm Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Forus Health: Crossing the Disruptive Product Chasm 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.
Highly skilled collaborators
– 3nethra Forus 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 Forus Health: Crossing the Disruptive Product Chasm HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- 3nethra Forus 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 3nethra Forus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Forus Health: Crossing the Disruptive Product Chasm Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of 3nethra Forus in the sector have low bargaining power. Forus Health: Crossing the Disruptive Product Chasm has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps 3nethra Forus to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– 3nethra Forus is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the 3nethra Forus 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 recruit top talent
– 3nethra Forus is one of the leading recruiters in the industry. Managers in the Forus Health: Crossing the Disruptive Product Chasm are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of 3nethra Forus
– The covid-19 pandemic has put organizational resilience at the centre of everthing that 3nethra Forus does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that 3nethra Forus 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.
Diverse revenue streams
– 3nethra Forus is present in almost all the verticals within the industry. This has provided firm in Forus Health: Crossing the Disruptive Product Chasm 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.
High brand equity
– 3nethra Forus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled 3nethra Forus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Sales & Marketing field
– 3nethra Forus 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 3nethra Forus in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Forus Health: Crossing the Disruptive Product Chasm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Forus Health: Crossing the Disruptive Product Chasm are -
Workers concerns about automation
– As automation is fast increasing in the segment, 3nethra Forus needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Forus Health: Crossing the Disruptive Product Chasm 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 3nethra Forus has relatively successful track record of launching new products.
Need for greater diversity
– 3nethra Forus 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Forus Health: Crossing the Disruptive Product Chasm, it seems that the employees of 3nethra Forus 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.
Lack of clear differentiation of 3nethra Forus products
– To increase the profitability and margins on the products, 3nethra Forus needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Forus Health: Crossing the Disruptive Product Chasm, is just above the industry average. 3nethra Forus 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.
Interest costs
– Compare to the competition, 3nethra Forus has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Forus Health: Crossing the Disruptive Product Chasm HBR case study mentions - 3nethra Forus 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Forus Health: Crossing the Disruptive Product Chasm 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 3nethra Forus 's lucrative customers.
High cash cycle compare to competitors
3nethra Forus 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 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 3nethra Forus supply chain. Even after few cautionary changes mentioned in the HBR case study - Forus Health: Crossing the Disruptive Product Chasm, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left 3nethra Forus vulnerable to further global disruptions in South East Asia.
Opportunities Forus Health: Crossing the Disruptive Product Chasm | 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 Forus Health: Crossing the Disruptive Product Chasm are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. 3nethra Forus 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. 3nethra Forus 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.
Manufacturing automation
– 3nethra Forus can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Building a culture of innovation
– managers at 3nethra Forus 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 Sales & Marketing segment.
Buying journey improvements
– 3nethra Forus can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Forus Health: Crossing the Disruptive Product Chasm 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
– 3nethra Forus 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 Forus Health: Crossing the Disruptive Product Chasm - to build a competitive advantage using analytics. The analytics driven competitive advantage can help 3nethra Forus to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for 3nethra Forus 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 3nethra Forus to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, 3nethra Forus 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, Forus Health: Crossing the Disruptive Product Chasm, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 3nethra Forus in the consumer business. Now 3nethra Forus 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. 3nethra Forus 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 3nethra Forus has opened avenues for new revenue streams for the organization in the industry. This can help 3nethra Forus to build a more holistic ecosystem as suggested in the Forus Health: Crossing the Disruptive Product Chasm case study. 3nethra Forus can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects 3nethra Forus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. 3nethra Forus can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– 3nethra Forus has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Forus Health: Crossing the Disruptive Product Chasm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Forus Health: Crossing the Disruptive Product Chasm are -
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. 3nethra Forus needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 3nethra Forus in the Sales & Marketing sector and impact the bottomline of the organization.
Regulatory challenges
– 3nethra Forus 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 Sales & Marketing industry regulations.
Consumer confidence and its impact on 3nethra Forus 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.
Environmental challenges
– 3nethra Forus 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. 3nethra Forus can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing wage structure of 3nethra Forus
– 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 3nethra Forus.
Shortening product life cycle
– it is one of the major threat that 3nethra Forus is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 3nethra Forus business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– 3nethra Forus has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, 3nethra Forus needs to keep up with the evolution of technology in the Sales & Marketing 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Forus Health: Crossing the Disruptive Product Chasm, 3nethra Forus may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 3nethra Forus in the Sales & Marketing industry. The Sales & Marketing 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 3nethra Forus with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Forus Health: Crossing the Disruptive Product Chasm 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 Forus Health: Crossing the Disruptive Product Chasm 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 Forus Health: Crossing the Disruptive Product Chasm 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 Forus Health: Crossing the Disruptive Product Chasm 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 Forus Health: Crossing the Disruptive Product Chasm 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 3nethra Forus needs to make to build a sustainable competitive advantage.