Active Coatings, Inc.: Challenges in Managing Product Development (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Active Coatings, Inc.: Challenges in Managing Product Development (A)
Two entrepreneurs face a tough decision when confronted with disappointing test results from the medical application they have chosen to commercialize their innovative process technology. They must decide whether to redesign the technology's current lead-application or to change applications altogether.
Authors :: Elizabeth Olmsted Teisberg, James Leonard
Swot Analysis of "Active Coatings, Inc.: Challenges in Managing Product Development (A)" written by Elizabeth Olmsted Teisberg, James Leonard includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Application Coatings facing as an external strategic factors. Some of the topics covered in Active Coatings, Inc.: Challenges in Managing Product Development (A) case study are - Strategic Management Strategies, Entrepreneurial management, Product development, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Active Coatings, Inc.: Challenges in Managing Product Development (A) casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, technology disruption, supply chains are disrupted by pandemic , increasing energy prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
there is backlash against globalization, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Active Coatings, Inc.: Challenges in Managing Product Development (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Active Coatings, Inc.: Challenges in Managing Product Development (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Application Coatings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Application Coatings 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) can be done for the following purposes –
1. Strategic planning using facts provided in Active Coatings, Inc.: Challenges in Managing Product Development (A) case study
2. Improving business portfolio management of Application Coatings
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 Application Coatings
Strengths Active Coatings, Inc.: Challenges in Managing Product Development (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Application Coatings in Active Coatings, Inc.: Challenges in Managing Product Development (A) Harvard Business Review case study are -
Learning organization
- Application Coatings 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 Application Coatings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Active Coatings, Inc.: Challenges in Managing Product Development (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Application Coatings 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 Application Coatings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Application Coatings
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Application Coatings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Application Coatings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Application Coatings 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.
Innovation driven organization
– Application Coatings is one of the most innovative firm in sector. Manager in Active Coatings, Inc.: Challenges in Managing Product Development (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Application Coatings has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Active Coatings, Inc.: Challenges in Managing Product Development (A) 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.
Effective Research and Development (R&D)
– Application Coatings 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Application Coatings 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Active Coatings, Inc.: Challenges in Managing Product Development (A) 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 Application Coatings 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Active Coatings, Inc.: Challenges in Managing Product Development (A) firm has clearly differentiated products in the market place. This has enabled Application Coatings to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Application Coatings to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Application Coatings 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.
Weaknesses Active Coatings, Inc.: Challenges in Managing Product Development (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Active Coatings, Inc.: Challenges in Managing Product Development (A) are -
Skills based hiring
– The stress on hiring functional specialists at Application Coatings has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Active Coatings, Inc.: Challenges in Managing Product Development (A), it seems that the employees of Application Coatings 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.
Capital Spending Reduction
– Even during the low interest decade, Application Coatings 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Application Coatings 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.
Products dominated business model
– Even though Application Coatings 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 - Active Coatings, Inc.: Challenges in Managing Product Development (A) should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Active Coatings, Inc.: Challenges in Managing Product Development (A), is just above the industry average. Application Coatings 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.
Lack of clear differentiation of Application Coatings products
– To increase the profitability and margins on the products, Application Coatings needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Active Coatings, Inc.: Challenges in Managing Product Development (A) 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) can leverage the sales team experience to cultivate customer relationships as Application Coatings is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Application Coatings is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Application Coatings needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Application Coatings to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Application Coatings supply chain. Even after few cautionary changes mentioned in the HBR case study - Active Coatings, Inc.: Challenges in Managing Product Development (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Application Coatings vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Application Coatings is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Active Coatings, Inc.: Challenges in Managing Product Development (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Active Coatings, Inc.: Challenges in Managing Product Development (A) | 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) are -
Developing new processes and practices
– Application Coatings 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Application Coatings can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Application Coatings 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.
Learning at scale
– Online learning technologies has now opened space for Application Coatings 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Application Coatings is facing challenges because of the dominance of functional experts in the organization. Active Coatings, Inc.: Challenges in Managing Product Development (A) 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.
Leveraging digital technologies
– Application Coatings 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.
Better consumer reach
– The expansion of the 5G network will help Application Coatings to increase its market reach. Application Coatings 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.
Buying journey improvements
– Application Coatings can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Active Coatings, Inc.: Challenges in Managing Product Development (A) 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Application Coatings in the consumer business. Now Application Coatings can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Application Coatings 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.
Building a culture of innovation
– managers at Application Coatings 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 Strategy & Execution segment.
Manufacturing automation
– Application Coatings 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Application Coatings 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 Application Coatings to hire the very best people irrespective of their geographical location.
Threats Active Coatings, Inc.: Challenges in Managing Product Development (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Active Coatings, Inc.: Challenges in Managing Product Development (A) are -
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. Application Coatings needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Application Coatings 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Application Coatings 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Application Coatings 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.
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.
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 Application Coatings business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Application Coatings is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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. Application Coatings can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Application Coatings in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Application Coatings 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.
Regulatory challenges
– Application Coatings 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Application Coatings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Active Coatings, Inc.: Challenges in Managing Product Development (A) 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) 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 Active Coatings, Inc.: Challenges in Managing Product Development (A) 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 Application Coatings needs to make to build a sustainable competitive advantage.
