Optical Distortion, Inc. (C): The 1988 Reintroduction SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Optical Distortion, Inc. (C): The 1988 Reintroduction
In 1988, Optical Distortion, Inc. was ready to reintroduce its only product, contact lenses for chickens. Tests had shown that the lenses significantly reduced bird aggression and feed costs, leading to potentially huge cost savings for egg producers. In the years since the (A) case, margins for egg producers had become so small that if a large producer could sustain a significant cost advantage, many small producers could be forced out of business. In this case the company's only salesperson must decide whether to concentrate on closing a sale to an aggressive major producer who may demand all the company's capacity for the next year, or to spend time spreading the word to smaller more vulnerable producers. In doing so, he faces the difficulty of convincing the farmers that cost savings which appear "too good to be true" are, in fact, real. The case is short and can be used in conjunction with Optical Distortion, Inc. (A). In addition to the ethical issues, it also raises issues of sales strategy and the diffusion of innovations, and can be used to examine negotiation strategies.
Swot Analysis of "Optical Distortion, Inc. (C): The 1988 Reintroduction" written by Patrick J. Kaufmann includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Distortion Optical facing as an external strategic factors. Some of the topics covered in Optical Distortion, Inc. (C): The 1988 Reintroduction case study are - Strategic Management Strategies, Marketing, Negotiations, Product development, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Optical Distortion, Inc. (C): The 1988 Reintroduction casestudy better are - – increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing energy prices, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Optical Distortion, Inc. (C): The 1988 Reintroduction
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Optical Distortion, Inc. (C): The 1988 Reintroduction case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Distortion Optical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Distortion Optical 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 Optical Distortion, Inc. (C): The 1988 Reintroduction can be done for the following purposes –
1. Strategic planning using facts provided in Optical Distortion, Inc. (C): The 1988 Reintroduction case study
2. Improving business portfolio management of Distortion Optical
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 Distortion Optical
Strengths Optical Distortion, Inc. (C): The 1988 Reintroduction | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Distortion Optical in Optical Distortion, Inc. (C): The 1988 Reintroduction Harvard Business Review case study are -
Ability to recruit top talent
– Distortion Optical is one of the leading recruiters in the industry. Managers in the Optical Distortion, Inc. (C): The 1988 Reintroduction are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Distortion Optical 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 Optical Distortion, Inc. (C): The 1988 Reintroduction - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Distortion Optical 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 Patrick J. Kaufmann 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.
Cross disciplinary teams
– Horizontal connected teams at the Distortion Optical 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
– Distortion Optical 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 Optical Distortion, Inc. (C): The 1988 Reintroduction HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Distortion Optical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Sales & Marketing industry
– Optical Distortion, Inc. (C): The 1988 Reintroduction firm has clearly differentiated products in the market place. This has enabled Distortion Optical to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Distortion Optical to invest into research and development (R&D) and innovation.
Ability to lead change in Sales & Marketing field
– Distortion Optical 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 Distortion Optical 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 Optical Distortion, Inc. (C): The 1988 Reintroduction 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.
High switching costs
– The high switching costs that Distortion Optical 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.
Innovation driven organization
– Distortion Optical is one of the most innovative firm in sector. Manager in Optical Distortion, Inc. (C): The 1988 Reintroduction Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Distortion Optical has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Distortion Optical 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.
Weaknesses Optical Distortion, Inc. (C): The 1988 Reintroduction | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Optical Distortion, Inc. (C): The 1988 Reintroduction are -
Capital Spending Reduction
– Even during the low interest decade, Distortion Optical 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Patrick J. Kaufmann suggests that, Distortion Optical is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Distortion Optical products
– To increase the profitability and margins on the products, Distortion Optical needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Distortion Optical has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Optical Distortion, Inc. (C): The 1988 Reintroduction 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 Distortion Optical has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Optical Distortion, Inc. (C): The 1988 Reintroduction, in the dynamic environment Distortion Optical has struggled to respond to the nimble upstart competition. Distortion Optical has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Optical Distortion, Inc. (C): The 1988 Reintroduction 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 Distortion Optical 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Distortion Optical 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. Distortion Optical 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 Distortion Optical supply chain. Even after few cautionary changes mentioned in the HBR case study - Optical Distortion, Inc. (C): The 1988 Reintroduction, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Distortion Optical vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Optical Distortion, Inc. (C): The 1988 Reintroduction 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 Optical Distortion, Inc. (C): The 1988 Reintroduction can leverage the sales team experience to cultivate customer relationships as Distortion Optical is planning to shift buying processes online.
Products dominated business model
– Even though Distortion Optical has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Optical Distortion, Inc. (C): The 1988 Reintroduction should strive to include more intangible value offerings along with its core products and services.
Opportunities Optical Distortion, Inc. (C): The 1988 Reintroduction | 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 Optical Distortion, Inc. (C): The 1988 Reintroduction are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Distortion Optical can use these opportunities to build new business models that can help the communities that Distortion Optical 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. Distortion Optical 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 Distortion Optical 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Distortion Optical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Distortion Optical 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.
Learning at scale
– Online learning technologies has now opened space for Distortion Optical 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.
Buying journey improvements
– Distortion Optical can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Optical Distortion, Inc. (C): The 1988 Reintroduction 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Distortion Optical is facing challenges because of the dominance of functional experts in the organization. Optical Distortion, Inc. (C): The 1988 Reintroduction 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.
Creating value in data economy
– The success of analytics program of Distortion Optical has opened avenues for new revenue streams for the organization in the industry. This can help Distortion Optical to build a more holistic ecosystem as suggested in the Optical Distortion, Inc. (C): The 1988 Reintroduction case study. Distortion Optical 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 Distortion Optical 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.
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. Distortion Optical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Distortion Optical 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.
Loyalty marketing
– Distortion Optical has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Optical Distortion, Inc. (C): The 1988 Reintroduction External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Optical Distortion, Inc. (C): The 1988 Reintroduction are -
Environmental challenges
– Distortion Optical 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. Distortion Optical can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
Regulatory challenges
– Distortion Optical needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Technology acceleration in Forth Industrial Revolution
– Distortion Optical has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Distortion Optical 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.
Increasing wage structure of Distortion Optical
– 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 Distortion Optical.
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. Distortion Optical needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Distortion Optical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Distortion Optical 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 Distortion Optical.
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. Distortion Optical can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Distortion Optical 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.
High dependence on third party suppliers
– Distortion Optical 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.
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. Distortion Optical 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 Optical Distortion, Inc. (C): The 1988 Reintroduction 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 Optical Distortion, Inc. (C): The 1988 Reintroduction 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 Optical Distortion, Inc. (C): The 1988 Reintroduction 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 Optical Distortion, Inc. (C): The 1988 Reintroduction 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 Optical Distortion, Inc. (C): The 1988 Reintroduction 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 Distortion Optical needs to make to build a sustainable competitive advantage.