Case Study Description of Marketing the "$100 Laptop" (A)
To maximize their effectiveness, color cases should be printed in color.In 2002, Professor Nicholas Negroponte, a successful venture capitalist, author, and co-founder and chairman emeritus of the Massachusetts Institute of Technology (MIT) Media Lab, announced his intention to build a PC so cheap as to make it possible to provide Internet- and multimedia-capable machines to millions of children in developing countries. The concept--subsequently often referred to as the "$100 PC"--was launched at the Media Lab in 2003 before being spun into a separate nonprofit association, One Laptop Per Child (OLPC), founded by Negroponte in January 2005. At the time skeptics, including technology industry leaders, argued that it simply could not be done. Through innovative design and technology, Negroponte and his team proved them wrong but struggled to sell the concept and the machines to the world's education ministries, who would be purchasing the laptops for their school age children. Furthermore, by 2007, many other low-cost PC options had emerged and OLPC had not started shipping yet, leading some observers to wonder if the non-profit should reconsider its strategy and options
Swot Analysis of "Marketing the "$100 Laptop" (A)" written by John A. Quelch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Negroponte Olpc facing as an external strategic factors. Some of the topics covered in Marketing the "$100 Laptop" (A) case study are - Strategic Management Strategies, Emerging markets, Internet, IT, Marketing, Product development, Venture capital and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Marketing the "$100 Laptop" (A) casestudy better are - – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, etc
Introduction to SWOT Analysis of Marketing the "$100 Laptop" (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Marketing the "$100 Laptop" (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Negroponte Olpc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Negroponte Olpc 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 Marketing the "$100 Laptop" (A) can be done for the following purposes –
1. Strategic planning using facts provided in Marketing the "$100 Laptop" (A) case study
2. Improving business portfolio management of Negroponte Olpc
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 Negroponte Olpc
Strengths Marketing the "$100 Laptop" (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Negroponte Olpc in Marketing the "$100 Laptop" (A) Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Marketing the "$100 Laptop" (A) firm has clearly differentiated products in the market place. This has enabled Negroponte Olpc to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Negroponte Olpc to invest into research and development (R&D) and innovation.
High brand equity
– Negroponte Olpc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Negroponte Olpc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Negroponte Olpc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Negroponte Olpc 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 Negroponte Olpc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Marketing the "$100 Laptop" (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Negroponte Olpc
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Negroponte Olpc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Negroponte Olpc has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Marketing the "$100 Laptop" (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Negroponte Olpc 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.
Low bargaining power of suppliers
– Suppliers of Negroponte Olpc in the sector have low bargaining power. Marketing the "$100 Laptop" (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Negroponte Olpc to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Negroponte Olpc is one of the leading recruiters in the industry. Managers in the Marketing the "$100 Laptop" (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Negroponte Olpc 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.
Operational resilience
– The operational resilience strategy in the Marketing the "$100 Laptop" (A) 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.
Analytics focus
– Negroponte Olpc is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by John A. Quelch can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Marketing the "$100 Laptop" (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Marketing the "$100 Laptop" (A) are -
No frontier risks strategy
– After analyzing the HBR case study Marketing the "$100 Laptop" (A), it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Interest costs
– Compare to the competition, Negroponte Olpc 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Negroponte Olpc 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 Marketing the "$100 Laptop" (A) 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 Negroponte Olpc has relatively successful track record of launching new products.
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 Negroponte Olpc supply chain. Even after few cautionary changes mentioned in the HBR case study - Marketing the "$100 Laptop" (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Negroponte Olpc vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Negroponte Olpc is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Negroponte Olpc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Negroponte Olpc to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Negroponte Olpc has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Negroponte Olpc 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.
Slow decision making process
– As mentioned earlier in the report, Negroponte Olpc 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. Negroponte Olpc 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.
High cash cycle compare to competitors
Negroponte Olpc 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Marketing the "$100 Laptop" (A), it seems that the employees of Negroponte Olpc 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.
Opportunities Marketing the "$100 Laptop" (A) | 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 Marketing the "$100 Laptop" (A) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Negroponte Olpc is facing challenges because of the dominance of functional experts in the organization. Marketing the "$100 Laptop" (A) 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.
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. Negroponte Olpc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Negroponte Olpc in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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. Negroponte Olpc 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
– Negroponte Olpc 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.
Developing new processes and practices
– Negroponte Olpc can develop new processes and procedures in Sales & Marketing 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.
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. Negroponte Olpc 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. Negroponte Olpc 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Negroponte Olpc 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
– Negroponte Olpc 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 Marketing the "$100 Laptop" (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Negroponte Olpc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Negroponte Olpc to increase its market reach. Negroponte Olpc will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Negroponte Olpc can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Marketing the "$100 Laptop" (A) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Negroponte Olpc 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, Marketing the "$100 Laptop" (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Negroponte Olpc 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.
Threats Marketing the "$100 Laptop" (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Marketing the "$100 Laptop" (A) 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 Negroponte Olpc business can come under increasing regulations regarding data privacy, data security, etc.
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.
Environmental challenges
– Negroponte Olpc 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. Negroponte Olpc can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Stagnating economy with rate increase
– Negroponte Olpc 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.
Increasing wage structure of Negroponte Olpc
– 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 Negroponte Olpc.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Negroponte Olpc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Negroponte Olpc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Negroponte Olpc has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Negroponte Olpc 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.
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. Negroponte Olpc needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Negroponte Olpc.
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 Negroponte Olpc in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Negroponte Olpc 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 Marketing the "$100 Laptop" (A) .
Shortening product life cycle
– it is one of the major threat that Negroponte Olpc is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Marketing the "$100 Laptop" (A) 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 Marketing the "$100 Laptop" (A) 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 Marketing the "$100 Laptop" (A) 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 Marketing the "$100 Laptop" (A) 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 Marketing the "$100 Laptop" (A) 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 Negroponte Olpc needs to make to build a sustainable competitive advantage.