Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging
Some technology transitions are exceedingly difficult for incumbent firms to execute. The bankruptcy filing by the Eastman Kodak Company highlighted the difficulty companies faced when their core business transitioned from an analog to a digital world. Kodak's business was built on the sale of a complex manufactured product - color photographic film that was exceedingly difficult to manufacture - with correspondingly high barriers to entry. Over more than a century, it developed the complex chemistry and high speed coating technologies that enabled it to roll-coat tiny strips of plastic with as many as 24 layers of complex organic dyes and photosensitizers at thousands of square feet per minute. Its color film and paper products including Kodachrome and Kodacolor preserved many of the iconic images of the last century. Beginning in the 1990s, the company built a digital photography business, yet by 2012 the company was in reorganization and its prognosis was guarded. Kodak faced a particularly challenging analog to digital transition, like many companies that have faced the waves of creative destruction wrought by technological innovation. Why was an analog to digital transition in the core technology of a business particularly challenging? This note reviews some of the management research on how firms have fared with technology transitions, and then explains why the conversion of a technology from analog to digital is uniquely problematic. The challenge that faced Kodak is the same challenge facing companies like Panasonic and Sony, telecom equipment companies, and other industries now that the underlying technology through which products and services are built has changed. This note discusses technical aspects of the transition from analog to digital technology, and why incumbent firms like Kodak, Sony, and Panasonic experience such difficulties.
Swot Analysis of "Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging" written by Willy Shih includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Analog Kodak facing as an external strategic factors. Some of the topics covered in Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging case study are - Strategic Management Strategies, Disruptive innovation, Product development, Supply chain, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, technology disruption, cloud computing is disrupting traditional business models,
there is increasing trade war between United States & China, increasing commodity prices, etc
Introduction to SWOT Analysis of Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Analog Kodak, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Analog Kodak 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging can be done for the following purposes –
1. Strategic planning using facts provided in Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging case study
2. Improving business portfolio management of Analog Kodak
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 Analog Kodak
Strengths Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Analog Kodak in Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Analog Kodak 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.
Learning organization
- Analog Kodak 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 Analog Kodak is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Analog Kodak is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Analog Kodak has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Analog Kodak 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.
Ability to recruit top talent
– Analog Kodak is one of the leading recruiters in the industry. Managers in the Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Analog Kodak 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Analog Kodak has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Analog Kodak to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Analog Kodak 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 Willy Shih 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.
Effective Research and Development (R&D)
– Analog Kodak 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Analog Kodak
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Analog Kodak does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Analog Kodak 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.
Operational resilience
– The operational resilience strategy in the Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging 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.
Weaknesses Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging are -
Low market penetration in new markets
– Outside its home market of Analog Kodak, firm in the HBR case study Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging can leverage the sales team experience to cultivate customer relationships as Analog Kodak is planning to shift buying processes online.
High cash cycle compare to competitors
Analog Kodak 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.
Lack of clear differentiation of Analog Kodak products
– To increase the profitability and margins on the products, Analog Kodak needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Analog Kodak 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 - Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Analog Kodak has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Analog Kodak 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging, it seems that the employees of Analog Kodak 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.
Increasing silos among functional specialists
– The organizational structure of Analog Kodak is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Analog Kodak needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Analog Kodak to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Analog Kodak 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 Analog Kodak supply chain. Even after few cautionary changes mentioned in the HBR case study - Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Analog Kodak vulnerable to further global disruptions in South East Asia.
Opportunities Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging | 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging are -
Loyalty marketing
– Analog Kodak 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.
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. Analog Kodak can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Analog Kodak has opened avenues for new revenue streams for the organization in the industry. This can help Analog Kodak to build a more holistic ecosystem as suggested in the Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging case study. Analog Kodak can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Analog Kodak can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging 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, Analog Kodak is facing challenges because of the dominance of functional experts in the organization. Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging 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 Analog Kodak 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Analog Kodak can use these opportunities to build new business models that can help the communities that Analog Kodak operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Analog Kodak to increase its market reach. Analog Kodak 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.
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. Analog Kodak can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Analog Kodak 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Analog Kodak 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 Analog Kodak to hire the very best people irrespective of their geographical location.
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 Analog Kodak 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Analog Kodak 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, Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging, Analog Kodak 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 .
Shortening product life cycle
– it is one of the major threat that Analog Kodak is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Analog Kodak with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Analog Kodak.
Stagnating economy with rate increase
– Analog Kodak 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.
Consumer confidence and its impact on Analog Kodak 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Analog Kodak 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging .
Technology acceleration in Forth Industrial Revolution
– Analog Kodak has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Analog Kodak 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Analog Kodak can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Analog Kodak
– 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 Analog Kodak.
Regulatory challenges
– Analog Kodak 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 Strategy & Execution industry regulations.
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 Analog Kodak in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging 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 Competency-Destroying Technology Transitions: Why the Transition to Digital Is Particularly Challenging 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 Analog Kodak needs to make to build a sustainable competitive advantage.
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