Case Study Description of ROLM: The SIGMA Introduction
ROLM's product development manager, Bob Lundy, has to prepare a detailed plan for launching a new product, code named SIGMA. The new product, though outstanding in features, has the potential to drastically affect ROLM's fortunes because it is incompatible with its installed base. Unadvertised per Case Records.
Swot Analysis of "ROLM: The SIGMA Introduction" written by V. Kasturi Rangan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rolm's Sigma facing as an external strategic factors. Some of the topics covered in ROLM: The SIGMA Introduction case study are - Strategic Management Strategies, Product development, Strategy execution and Sales & Marketing.
Some of the macro environment factors that can be used to understand the ROLM: The SIGMA Introduction casestudy better are - – wage bills are increasing, increasing energy prices, technology disruption, increasing government debt because of Covid-19 spendings, there is backlash against globalization, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of ROLM: The SIGMA Introduction
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ROLM: The SIGMA Introduction case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rolm's Sigma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rolm's Sigma 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 ROLM: The SIGMA Introduction can be done for the following purposes –
1. Strategic planning using facts provided in ROLM: The SIGMA Introduction case study
2. Improving business portfolio management of Rolm's Sigma
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 Rolm's Sigma
Strengths ROLM: The SIGMA Introduction | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rolm's Sigma in ROLM: The SIGMA Introduction Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– ROLM: The SIGMA Introduction firm has clearly differentiated products in the market place. This has enabled Rolm's Sigma to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Rolm's Sigma to invest into research and development (R&D) and innovation.
High brand equity
– Rolm's Sigma has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rolm's Sigma to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Rolm's Sigma 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 ROLM: The SIGMA Introduction - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Rolm's Sigma is one of the leading recruiters in the industry. Managers in the ROLM: The SIGMA Introduction 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 Rolm's Sigma
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rolm's Sigma does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Rolm's Sigma is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Rolm's Sigma has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rolm's Sigma 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.
Diverse revenue streams
– Rolm's Sigma is present in almost all the verticals within the industry. This has provided firm in ROLM: The SIGMA Introduction 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.
Training and development
– Rolm's Sigma has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ROLM: The SIGMA Introduction 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.
Low bargaining power of suppliers
– Suppliers of Rolm's Sigma in the sector have low bargaining power. ROLM: The SIGMA Introduction has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rolm's Sigma to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Rolm's Sigma 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.
Analytics focus
– Rolm's Sigma 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 V. Kasturi Rangan 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 ROLM: The SIGMA Introduction | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ROLM: The SIGMA Introduction are -
Skills based hiring
– The stress on hiring functional specialists at Rolm's Sigma 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.
High cash cycle compare to competitors
Rolm's Sigma 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ROLM: The SIGMA Introduction, is just above the industry average. Rolm's Sigma 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.
Slow decision making process
– As mentioned earlier in the report, Rolm's Sigma 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. Rolm's Sigma 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 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 Rolm's Sigma supply chain. Even after few cautionary changes mentioned in the HBR case study - ROLM: The SIGMA Introduction, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rolm's Sigma vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Rolm's Sigma has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Interest costs
– Compare to the competition, Rolm's Sigma 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.
Aligning sales with marketing
– It come across in the case study ROLM: The SIGMA Introduction 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 ROLM: The SIGMA Introduction can leverage the sales team experience to cultivate customer relationships as Rolm's Sigma is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study ROLM: The SIGMA Introduction, 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.
Low market penetration in new markets
– Outside its home market of Rolm's Sigma, firm in the HBR case study ROLM: The SIGMA Introduction needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As ROLM: The SIGMA Introduction HBR case study mentions - Rolm's Sigma 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.
Opportunities ROLM: The SIGMA Introduction | 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 ROLM: The SIGMA Introduction are -
Leveraging digital technologies
– Rolm's Sigma 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.
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 Rolm's Sigma in the consumer business. Now Rolm's Sigma can target international markets with far fewer capital restrictions requirements than the existing system.
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 Rolm's Sigma 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rolm's Sigma is facing challenges because of the dominance of functional experts in the organization. ROLM: The SIGMA Introduction 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.
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. Rolm's Sigma 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. Rolm's Sigma 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.
Developing new processes and practices
– Rolm's Sigma 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.
Creating value in data economy
– The success of analytics program of Rolm's Sigma has opened avenues for new revenue streams for the organization in the industry. This can help Rolm's Sigma to build a more holistic ecosystem as suggested in the ROLM: The SIGMA Introduction case study. Rolm's Sigma 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 Rolm's Sigma can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Rolm's Sigma 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.
Learning at scale
– Online learning technologies has now opened space for Rolm's Sigma 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rolm's Sigma 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, ROLM: The SIGMA Introduction, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Rolm's Sigma 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rolm's Sigma can use these opportunities to build new business models that can help the communities that Rolm's Sigma operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats ROLM: The SIGMA Introduction External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ROLM: The SIGMA Introduction are -
Consumer confidence and its impact on Rolm's Sigma 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ROLM: The SIGMA Introduction, Rolm's Sigma 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 .
Shortening product life cycle
– it is one of the major threat that Rolm's Sigma is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Rolm's Sigma needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Rolm's Sigma
– 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 Rolm's Sigma.
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 Rolm's Sigma.
High dependence on third party suppliers
– Rolm's Sigma 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.
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 Rolm's Sigma 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.
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.
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 Rolm's Sigma in the Sales & Marketing sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rolm's Sigma 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.
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. Rolm's Sigma 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.
Weighted SWOT Analysis of ROLM: The SIGMA Introduction 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 ROLM: The SIGMA Introduction 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 ROLM: The SIGMA Introduction 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 ROLM: The SIGMA Introduction 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 ROLM: The SIGMA Introduction 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 Rolm's Sigma needs to make to build a sustainable competitive advantage.
