Spectio: A Digital Lighting Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Spectio: A Digital Lighting Company
Spectio Tech, founded in 2005, developed and implemented intelligent LED lighting solutions for the industrial market. Sensors and wireless connectivity embedded in its LED fixtures not only significantly reduced lighting-related energy use-by up to 90% in some cases-but also served as a tool for the Internet of Things (IoT) to expose powerful insights about facility use. Yet in 2016, few of Spectio's customers were fully embracing the system as an IoT product. Both LED lighting and IoT were rapidly evolving markets, and Spectio had to decide if it should focus on driving down lighting hardware costs to expand its total addressable market or on improving the software controls to enhance the system's IoT functionality.
Swot Analysis of "Spectio: A Digital Lighting Company" written by Rajiv Lal, Sarah McAra includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lighting Spectio facing as an external strategic factors. Some of the topics covered in Spectio: A Digital Lighting Company case study are - Strategic Management Strategies, Internet and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Spectio: A Digital Lighting Company casestudy better are - – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models,
increasing commodity prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Spectio: A Digital Lighting Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Spectio: A Digital Lighting Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lighting Spectio, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lighting Spectio 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 Spectio: A Digital Lighting Company can be done for the following purposes –
1. Strategic planning using facts provided in Spectio: A Digital Lighting Company case study
2. Improving business portfolio management of Lighting Spectio
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 Lighting Spectio
Strengths Spectio: A Digital Lighting Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lighting Spectio in Spectio: A Digital Lighting Company Harvard Business Review case study are -
Effective Research and Development (R&D)
– Lighting Spectio 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 Spectio: A Digital Lighting Company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Lighting Spectio
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lighting Spectio does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Lighting Spectio is present in almost all the verticals within the industry. This has provided firm in Spectio: A Digital Lighting Company 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.
Ability to recruit top talent
– Lighting Spectio is one of the leading recruiters in the industry. Managers in the Spectio: A Digital Lighting Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Lighting Spectio is one of the most innovative firm in sector. Manager in Spectio: A Digital Lighting Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Lighting Spectio 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 Rajiv Lal, Sarah McAra 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.
Low bargaining power of suppliers
– Suppliers of Lighting Spectio in the sector have low bargaining power. Spectio: A Digital Lighting Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lighting Spectio to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Lighting Spectio in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Sales & Marketing field
– Lighting Spectio 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 Lighting Spectio in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Sales & Marketing industry
– Spectio: A Digital Lighting Company firm has clearly differentiated products in the market place. This has enabled Lighting Spectio to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Lighting Spectio to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Lighting Spectio has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lighting Spectio 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Lighting Spectio digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lighting Spectio 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.
Weaknesses Spectio: A Digital Lighting Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Spectio: A Digital Lighting Company are -
High cash cycle compare to competitors
Lighting Spectio 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.
Skills based hiring
– The stress on hiring functional specialists at Lighting Spectio 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.
Capital Spending Reduction
– Even during the low interest decade, Lighting Spectio 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Spectio: A Digital Lighting Company, is just above the industry average. Lighting Spectio needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Spectio: A Digital Lighting Company 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 Lighting Spectio 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lighting Spectio is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Spectio: A Digital Lighting Company can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Lighting Spectio products
– To increase the profitability and margins on the products, Lighting Spectio needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Lighting Spectio supply chain. Even after few cautionary changes mentioned in the HBR case study - Spectio: A Digital Lighting Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lighting Spectio vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Spectio: A Digital Lighting Company HBR case study mentions - Lighting Spectio 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.
Increasing silos among functional specialists
– The organizational structure of Lighting Spectio is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Lighting Spectio needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lighting Spectio to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Spectio: A Digital Lighting Company, it seems that the employees of Lighting Spectio 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 Spectio: A Digital Lighting Company | 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 Spectio: A Digital Lighting Company are -
Buying journey improvements
– Lighting Spectio can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Spectio: A Digital Lighting Company 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lighting Spectio 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.
Loyalty marketing
– Lighting Spectio 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.
Learning at scale
– Online learning technologies has now opened space for Lighting Spectio 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.
Creating value in data economy
– The success of analytics program of Lighting Spectio has opened avenues for new revenue streams for the organization in the industry. This can help Lighting Spectio to build a more holistic ecosystem as suggested in the Spectio: A Digital Lighting Company case study. Lighting Spectio can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Lighting Spectio 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.
Better consumer reach
– The expansion of the 5G network will help Lighting Spectio to increase its market reach. Lighting Spectio 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.
Manufacturing automation
– Lighting Spectio 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.
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. Lighting Spectio 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. Lighting Spectio 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, Lighting Spectio 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lighting Spectio can use these opportunities to build new business models that can help the communities that Lighting Spectio operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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. Lighting Spectio can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lighting Spectio 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 Lighting Spectio to hire the very best people irrespective of their geographical location.
Threats Spectio: A Digital Lighting Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Spectio: A Digital Lighting Company are -
High dependence on third party suppliers
– Lighting Spectio 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lighting Spectio 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 Spectio: A Digital Lighting Company .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lighting Spectio with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Lighting Spectio can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lighting Spectio 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.
Stagnating economy with rate increase
– Lighting Spectio 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 Lighting Spectio
– 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 Lighting Spectio.
Shortening product life cycle
– it is one of the major threat that Lighting Spectio is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Lighting Spectio.
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 Lighting Spectio business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Lighting Spectio 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. Lighting Spectio can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Spectio: A Digital Lighting Company 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 Spectio: A Digital Lighting Company 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 Spectio: A Digital Lighting Company 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 Spectio: A Digital Lighting Company 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 Spectio: A Digital Lighting Company 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 Lighting Spectio needs to make to build a sustainable competitive advantage.