Peripheral Products Co.: The "Gray Market" for Disk Drives SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Peripheral Products Co.: The "Gray Market" for Disk Drives
In mid-1985, the vice president of marketing for a large manufacturer of disk drives is considering how to deal with a growing "gray market" for his company's products. The case provides good background material on the evolution of gray markets throughout the disk drive industry, and raises related issues of pricing policies, distribution strategy, and sales force management. A condensed version of Note on the Disk Drive Industry, and Peripheral Products Co.
Swot Analysis of "Peripheral Products Co.: The "Gray Market" for Disk Drives" written by Frank V. Cespedes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Disk Gray facing as an external strategic factors. Some of the topics covered in Peripheral Products Co.: The "Gray Market" for Disk Drives case study are - Strategic Management Strategies, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Peripheral Products Co.: The "Gray Market" for Disk Drives casestudy better are - – there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing commodity prices, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, geopolitical disruptions,
wage bills are increasing, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Peripheral Products Co.: The "Gray Market" for Disk Drives
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Peripheral Products Co.: The "Gray Market" for Disk Drives case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Disk Gray, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Disk Gray 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 Peripheral Products Co.: The "Gray Market" for Disk Drives can be done for the following purposes –
1. Strategic planning using facts provided in Peripheral Products Co.: The "Gray Market" for Disk Drives case study
2. Improving business portfolio management of Disk Gray
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 Disk Gray
Strengths Peripheral Products Co.: The "Gray Market" for Disk Drives | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Disk Gray in Peripheral Products Co.: The "Gray Market" for Disk Drives Harvard Business Review case study are -
Strong track record of project management
– Disk Gray is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Sales & Marketing field
– Disk Gray 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 Disk Gray in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Peripheral Products Co.: The "Gray Market" for Disk Drives Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Disk Gray has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Disk Gray 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.
Analytics focus
– Disk Gray 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 Frank V. Cespedes 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.
Innovation driven organization
– Disk Gray is one of the most innovative firm in sector. Manager in Peripheral Products Co.: The "Gray Market" for Disk Drives Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Disk Gray
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Disk Gray does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Disk Gray has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Peripheral Products Co.: The "Gray Market" for Disk Drives 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.
Diverse revenue streams
– Disk Gray is present in almost all the verticals within the industry. This has provided firm in Peripheral Products Co.: The "Gray Market" for Disk Drives 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.
Cross disciplinary teams
– Horizontal connected teams at the Disk Gray 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.
Highly skilled collaborators
– Disk Gray 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 Peripheral Products Co.: The "Gray Market" for Disk Drives HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Disk Gray 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.
Weaknesses Peripheral Products Co.: The "Gray Market" for Disk Drives | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Peripheral Products Co.: The "Gray Market" for Disk Drives are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Peripheral Products Co.: The "Gray Market" for Disk Drives, it seems that the employees of Disk Gray 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.
High cash cycle compare to competitors
Disk Gray 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Disk Gray 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.
Aligning sales with marketing
– It come across in the case study Peripheral Products Co.: The "Gray Market" for Disk Drives 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 Peripheral Products Co.: The "Gray Market" for Disk Drives can leverage the sales team experience to cultivate customer relationships as Disk Gray is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Peripheral Products Co.: The "Gray Market" for Disk Drives 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 Disk Gray 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Peripheral Products Co.: The "Gray Market" for Disk Drives 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 Disk Gray has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Disk Gray 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.
Slow to strategic competitive environment developments
– As Peripheral Products Co.: The "Gray Market" for Disk Drives HBR case study mentions - Disk Gray 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 Disk Gray is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Disk Gray needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Disk Gray to focus more on services rather than just following the product oriented approach.
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 Disk Gray supply chain. Even after few cautionary changes mentioned in the HBR case study - Peripheral Products Co.: The "Gray Market" for Disk Drives, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Disk Gray vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Disk Gray is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Peripheral Products Co.: The "Gray Market" for Disk Drives can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Peripheral Products Co.: The "Gray Market" for Disk Drives | 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 Peripheral Products Co.: The "Gray Market" for Disk Drives are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Disk Gray 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, Peripheral Products Co.: The "Gray Market" for Disk Drives, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Disk Gray can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Disk Gray can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Peripheral Products Co.: The "Gray Market" for Disk Drives 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.
Manufacturing automation
– Disk Gray 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.
Creating value in data economy
– The success of analytics program of Disk Gray has opened avenues for new revenue streams for the organization in the industry. This can help Disk Gray to build a more holistic ecosystem as suggested in the Peripheral Products Co.: The "Gray Market" for Disk Drives case study. Disk Gray can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Disk Gray 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.
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. Disk Gray 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. Disk Gray 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.
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 Disk Gray in the consumer business. Now Disk Gray can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Disk Gray 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.
Building a culture of innovation
– managers at Disk Gray 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 Disk Gray to increase its market reach. Disk Gray 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Disk Gray is facing challenges because of the dominance of functional experts in the organization. Peripheral Products Co.: The "Gray Market" for Disk Drives 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Disk Gray 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 Disk Gray to hire the very best people irrespective of their geographical location.
Threats Peripheral Products Co.: The "Gray Market" for Disk Drives External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Peripheral Products Co.: The "Gray Market" for Disk Drives are -
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 Disk Gray in the Sales & Marketing sector and impact the bottomline of the organization.
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. Disk Gray needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Disk Gray 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.
Consumer confidence and its impact on Disk Gray 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.
Shortening product life cycle
– it is one of the major threat that Disk Gray is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Disk Gray 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. Disk Gray can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Disk Gray business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Disk Gray has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Disk Gray 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.
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. Disk Gray can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Peripheral Products Co.: The "Gray Market" for Disk Drives, Disk Gray 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Disk Gray 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 Peripheral Products Co.: The "Gray Market" for Disk Drives .
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.
Weighted SWOT Analysis of Peripheral Products Co.: The "Gray Market" for Disk Drives 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 Peripheral Products Co.: The "Gray Market" for Disk Drives 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 Peripheral Products Co.: The "Gray Market" for Disk Drives 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 Peripheral Products Co.: The "Gray Market" for Disk Drives 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 Peripheral Products Co.: The "Gray Market" for Disk Drives 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 Disk Gray needs to make to build a sustainable competitive advantage.