Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007)
This case study outlines the time period between 1982 and 2007 of Sun Microsystems. The case showcases the company's long history with open source software and open innovation, as well as its history of proprietary software and proprietary technology. With the company's announcement in 2006 that it would make much of its proprietary software available under open source terms, the company was again re-entering an open innovation phase, with the hope that the strategy would drive adoption of its software and thus increase revenue and profitability. By 2007, Sun Microsystems seemed to be on a path back to its more open technology roots and the case study ends at that point in the company's history.
Authors :: Henry W. Chesbrough, Margarita Constantinides
Swot Analysis of "Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007)" written by Henry W. Chesbrough, Margarita Constantinides includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Microsystems Sun facing as an external strategic factors. Some of the topics covered in Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) case study are - Strategic Management Strategies, Innovation, Technology, Venture capital and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) casestudy better are - – technology disruption, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , geopolitical disruptions, there is backlash against globalization,
increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Microsystems Sun, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Microsystems Sun 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) can be done for the following purposes –
1. Strategic planning using facts provided in Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) case study
2. Improving business portfolio management of Microsystems Sun
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 Microsystems Sun
Strengths Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Microsystems Sun in Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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.
Organizational Resilience of Microsystems Sun
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Microsystems Sun does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Microsystems Sun has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Microsystems Sun digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Microsystems Sun 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.
Ability to lead change in Strategy & Execution field
– Microsystems Sun 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 Microsystems Sun in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Microsystems Sun in the sector have low bargaining power. Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Microsystems Sun to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) firm has clearly differentiated products in the market place. This has enabled Microsystems Sun to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Microsystems Sun to invest into research and development (R&D) and innovation.
Innovation driven organization
– Microsystems Sun is one of the most innovative firm in sector. Manager in Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Microsystems Sun has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Microsystems Sun to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Microsystems Sun 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 Henry W. Chesbrough, Margarita Constantinides 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.
Highly skilled collaborators
– Microsystems Sun 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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 Microsystems Sun 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) are -
Products dominated business model
– Even though Microsystems Sun 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 - Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) HBR case study mentions - Microsystems Sun 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 Microsystems Sun is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Microsystems Sun needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Microsystems Sun to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Microsystems Sun 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Microsystems Sun 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.
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 Microsystems Sun supply chain. Even after few cautionary changes mentioned in the HBR case study - Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Microsystems Sun vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007), it seems that the employees of Microsystems Sun 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.
Slow decision making process
– As mentioned earlier in the report, Microsystems Sun 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. Microsystems Sun 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 star products
– The top 2 products and services of the firm as mentioned in the Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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 Microsystems Sun has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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 Microsystems Sun 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) can leverage the sales team experience to cultivate customer relationships as Microsystems Sun is planning to shift buying processes online.
Opportunities Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) | 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) are -
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. Microsystems Sun can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Microsystems Sun to increase its market reach. Microsystems Sun 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Microsystems Sun 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, Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Microsystems Sun 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.
Buying journey improvements
– Microsystems Sun can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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
– Microsystems Sun can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Learning at scale
– Online learning technologies has now opened space for Microsystems Sun 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.
Leveraging digital technologies
– Microsystems Sun 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Microsystems Sun can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Microsystems Sun 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 Microsystems Sun to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Microsystems Sun 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.
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 Microsystems Sun 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.
Developing new processes and practices
– Microsystems Sun can develop new processes and procedures in Strategy & Execution 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.
Threats Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Microsystems Sun 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Microsystems Sun 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.
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. Microsystems Sun 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.
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. Microsystems Sun needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Microsystems Sun 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. Microsystems Sun can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Microsystems Sun 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.
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 Microsystems Sun in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Microsystems Sun 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 Microsystems Sun is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Microsystems Sun has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Microsystems Sun needs to keep up with the evolution of technology in the Strategy & Execution 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.
Consumer confidence and its impact on Microsystems Sun 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.
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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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 Back to the Future: The Evolution of Sun Microsystems' Business Model (1982 to 2007) 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 Microsystems Sun needs to make to build a sustainable competitive advantage.
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