Darwinians at the Gate: Sustainability, Innovation and Growth at DSM SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Darwinians at the Gate: Sustainability, Innovation and Growth at DSM
For Feike Sijbesma, CEO of Royal DSM since 2007, rapid changes were normal as major trends were playing out. Global population swelled, the balance of wealth shifted, often increasing disparities and inequalities, while human beings remained hooked on using more resources than the planet could handle or replace. As early as 2010, DSM formulated a strategy to build on its strength in Life and Materials Sciences, capitalizing on what it saw as the most promising global megatrends, notably health & wellness, global shifts and energy & climate change. At DSM, sustainability went way beyond complying with laws and regulations: It was a key driver for innovation and a core value for the firm. In the aftermath of the financial crisis of 2007 and the ensuing recession, cost concerns came back to the forefront, pushing the sustainability agenda to the back. The sense of urgency on environmental and social issues was gone, so how could you convince people a totally different approach to doing business was needed? Could sustainability really be turned into an effective driver for innovation and ultimately improve a company's profitability? Were the three bottom lines - financial, social and environmental - really mutually self-reinforcing, instead of mutually exclusive? Proving the case to some still-reluctant financial investors could prove difficult. For DSM, the ultimate challenge to its broad-based sustainability agenda was quite clear: Could a case be made for sustainability as a key driver of value creation over the long term? Learning objectives: Sustainability as driver of innovation and growth, CSR in action, corporate venturing, sustainability strategies, growth management, portfolio management.
Swot Analysis of "Darwinians at the Gate: Sustainability, Innovation and Growth at DSM" written by Benoit Leleux, Jan Van Der Kaaij includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dsm Sustainability facing as an external strategic factors. Some of the topics covered in Darwinians at the Gate: Sustainability, Innovation and Growth at DSM case study are - Strategic Management Strategies, Innovation, Sustainability, Venture capital and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Darwinians at the Gate: Sustainability, Innovation and Growth at DSM casestudy better are - – talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, technology disruption, there is backlash against globalization, increasing transportation and logistics costs, increasing household debt because of falling income levels,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of Darwinians at the Gate: Sustainability, Innovation and Growth at DSM
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Darwinians at the Gate: Sustainability, Innovation and Growth at DSM case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dsm Sustainability, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dsm Sustainability 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 Darwinians at the Gate: Sustainability, Innovation and Growth at DSM can be done for the following purposes –
1. Strategic planning using facts provided in Darwinians at the Gate: Sustainability, Innovation and Growth at DSM case study
2. Improving business portfolio management of Dsm Sustainability
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dsm Sustainability
Strengths Darwinians at the Gate: Sustainability, Innovation and Growth at DSM | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dsm Sustainability in Darwinians at the Gate: Sustainability, Innovation and Growth at DSM Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Dsm Sustainability 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 Dsm Sustainability in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Dsm Sustainability has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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.
Operational resilience
– The operational resilience strategy in the Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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.
Learning organization
- Dsm Sustainability is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Dsm Sustainability is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Darwinians at the Gate: Sustainability, Innovation and Growth at DSM Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Dsm Sustainability
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dsm Sustainability does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Dsm Sustainability is present in almost all the verticals within the industry. This has provided firm in Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Dsm Sustainability digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dsm Sustainability 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.
Successful track record of launching new products
– Dsm Sustainability has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dsm Sustainability 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.
High switching costs
– The high switching costs that Dsm Sustainability 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.
Cross disciplinary teams
– Horizontal connected teams at the Dsm Sustainability 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.
High brand equity
– Dsm Sustainability has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dsm Sustainability to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Darwinians at the Gate: Sustainability, Innovation and Growth at DSM firm has clearly differentiated products in the market place. This has enabled Dsm Sustainability to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Dsm Sustainability to invest into research and development (R&D) and innovation.
Weaknesses Darwinians at the Gate: Sustainability, Innovation and Growth at DSM | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Darwinians at the Gate: Sustainability, Innovation and Growth at DSM are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Darwinians at the Gate: Sustainability, Innovation and Growth at DSM, is just above the industry average. Dsm Sustainability 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dsm Sustainability is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Darwinians at the Gate: Sustainability, Innovation and Growth at DSM can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Dsm Sustainability 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.
Capital Spending Reduction
– Even during the low interest decade, Dsm Sustainability 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 decision making process
– As mentioned earlier in the report, Dsm Sustainability 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. Dsm Sustainability 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Dsm Sustainability 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Darwinians at the Gate: Sustainability, Innovation and Growth at DSM, it seems that the employees of Dsm Sustainability 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
Dsm Sustainability 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.
Low market penetration in new markets
– Outside its home market of Dsm Sustainability, firm in the HBR case study Darwinians at the Gate: Sustainability, Innovation and Growth at DSM needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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 Dsm Sustainability 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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 Darwinians at the Gate: Sustainability, Innovation and Growth at DSM can leverage the sales team experience to cultivate customer relationships as Dsm Sustainability is planning to shift buying processes online.
Opportunities Darwinians at the Gate: Sustainability, Innovation and Growth at DSM | 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 Darwinians at the Gate: Sustainability, Innovation and Growth at DSM are -
Better consumer reach
– The expansion of the 5G network will help Dsm Sustainability to increase its market reach. Dsm Sustainability 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.
Creating value in data economy
– The success of analytics program of Dsm Sustainability has opened avenues for new revenue streams for the organization in the industry. This can help Dsm Sustainability to build a more holistic ecosystem as suggested in the Darwinians at the Gate: Sustainability, Innovation and Growth at DSM case study. Dsm Sustainability 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 Dsm Sustainability can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Dsm Sustainability 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.
Leveraging digital technologies
– Dsm Sustainability 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.
Buying journey improvements
– Dsm Sustainability can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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.
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 Dsm Sustainability 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Dsm Sustainability can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dsm Sustainability is facing challenges because of the dominance of functional experts in the organization. Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dsm Sustainability in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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. Dsm Sustainability can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dsm Sustainability 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, Darwinians at the Gate: Sustainability, Innovation and Growth at DSM, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dsm Sustainability 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. Dsm Sustainability 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.
Threats Darwinians at the Gate: Sustainability, Innovation and Growth at DSM External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Darwinians at the Gate: Sustainability, Innovation and Growth at DSM are -
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.
Stagnating economy with rate increase
– Dsm Sustainability 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.
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 Dsm Sustainability business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Darwinians at the Gate: Sustainability, Innovation and Growth at DSM, Dsm Sustainability may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dsm Sustainability in the Strategy & Execution industry. The Strategy & Execution 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.
Increasing wage structure of Dsm Sustainability
– 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 Dsm Sustainability.
Environmental challenges
– Dsm Sustainability 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. Dsm Sustainability can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Dsm Sustainability 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, Dsm Sustainability 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 Darwinians at the Gate: Sustainability, Innovation and Growth at DSM .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dsm Sustainability with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Dsm Sustainability in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Dsm Sustainability is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Dsm Sustainability 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.
Weighted SWOT Analysis of Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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 Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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 Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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 Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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 Darwinians at the Gate: Sustainability, Innovation and Growth at DSM 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 Dsm Sustainability needs to make to build a sustainable competitive advantage.
