Case Study Description of Digitas (A): Strategic Interactive Group
Kathy Biro, president of Digitas, an e-strategy consulting firm, has successfully grown out of the company's roots in the strategic interactive group. Her challenges now include managing the integration of the SIG with Digitas's other component, direct marketing firm Bronner Slosberg Humphrey (BSH), while at the same time differentiating the new firm from its competitors, strengthening the business model, and expanding geographically.
Authors :: Rosabeth Moss Kanter, David Lane, Courtenay Sprague
Swot Analysis of "Digitas (A): Strategic Interactive Group" written by Rosabeth Moss Kanter, David Lane, Courtenay Sprague includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Digitas Interactive facing as an external strategic factors. Some of the topics covered in Digitas (A): Strategic Interactive Group case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Digitas (A): Strategic Interactive Group casestudy better are - – supply chains are disrupted by pandemic , increasing commodity prices, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Digitas (A): Strategic Interactive Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Digitas (A): Strategic Interactive Group case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Digitas Interactive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Digitas Interactive 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 Digitas (A): Strategic Interactive Group can be done for the following purposes –
1. Strategic planning using facts provided in Digitas (A): Strategic Interactive Group case study
2. Improving business portfolio management of Digitas Interactive
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 Digitas Interactive
Strengths Digitas (A): Strategic Interactive Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Digitas Interactive in Digitas (A): Strategic Interactive Group Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Digitas (A): Strategic Interactive Group firm has clearly differentiated products in the market place. This has enabled Digitas Interactive to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Digitas Interactive to invest into research and development (R&D) and innovation.
High brand equity
– Digitas Interactive has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Digitas Interactive to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Digitas Interactive is one of the leading recruiters in the industry. Managers in the Digitas (A): Strategic Interactive Group are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Digitas Interactive has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Digitas (A): Strategic Interactive Group 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.
Highly skilled collaborators
– Digitas Interactive 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 Digitas (A): Strategic Interactive Group 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 Digitas (A): Strategic Interactive Group 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.
Low bargaining power of suppliers
– Suppliers of Digitas Interactive in the sector have low bargaining power. Digitas (A): Strategic Interactive Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Digitas Interactive to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Digitas Interactive is present in almost all the verticals within the industry. This has provided firm in Digitas (A): Strategic Interactive Group 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.
Learning organization
- Digitas Interactive 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 Digitas Interactive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Digitas (A): Strategic Interactive Group Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Digitas Interactive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Digitas Interactive 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.
Superior customer experience
– The customer experience strategy of Digitas Interactive in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Digitas Interactive is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Digitas (A): Strategic Interactive Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Digitas (A): Strategic Interactive Group are -
Slow decision making process
– As mentioned earlier in the report, Digitas Interactive 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. Digitas Interactive 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.
Lack of clear differentiation of Digitas Interactive products
– To increase the profitability and margins on the products, Digitas Interactive needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Digitas Interactive supply chain. Even after few cautionary changes mentioned in the HBR case study - Digitas (A): Strategic Interactive Group, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Digitas Interactive vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Digitas Interactive, firm in the HBR case study Digitas (A): Strategic Interactive Group needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Digitas Interactive is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Digitas (A): Strategic Interactive Group can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Rosabeth Moss Kanter, David Lane, Courtenay Sprague suggests that, Digitas Interactive is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to strategic competitive environment developments
– As Digitas (A): Strategic Interactive Group HBR case study mentions - Digitas Interactive 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Digitas (A): Strategic Interactive Group, it seems that the employees of Digitas Interactive 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 Digitas Interactive is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Digitas Interactive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Digitas Interactive to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Digitas (A): Strategic Interactive Group, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Digitas Interactive 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.
Opportunities Digitas (A): Strategic Interactive Group | 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 Digitas (A): Strategic Interactive Group are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Digitas Interactive 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, Digitas (A): Strategic Interactive Group, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Digitas Interactive 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.
Developing new processes and practices
– Digitas Interactive 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Digitas Interactive is facing challenges because of the dominance of functional experts in the organization. Digitas (A): Strategic Interactive Group 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.
Building a culture of innovation
– managers at Digitas Interactive 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Digitas Interactive can use these opportunities to build new business models that can help the communities that Digitas Interactive operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Digitas Interactive 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 Digitas Interactive 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 Digitas Interactive 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Digitas Interactive 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.
Leveraging digital technologies
– Digitas Interactive 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.
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. Digitas Interactive 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. Digitas Interactive 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.
Better consumer reach
– The expansion of the 5G network will help Digitas Interactive to increase its market reach. Digitas Interactive 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 Digitas Interactive has opened avenues for new revenue streams for the organization in the industry. This can help Digitas Interactive to build a more holistic ecosystem as suggested in the Digitas (A): Strategic Interactive Group case study. Digitas Interactive can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Digitas (A): Strategic Interactive Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Digitas (A): Strategic Interactive Group are -
High dependence on third party suppliers
– Digitas Interactive 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.
Environmental challenges
– Digitas Interactive 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. Digitas Interactive can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Digitas Interactive 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Digitas (A): Strategic Interactive Group, Digitas Interactive 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 .
Consumer confidence and its impact on Digitas Interactive 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, Digitas Interactive 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 Digitas (A): Strategic Interactive Group .
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. Digitas Interactive needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Digitas Interactive
– 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 Digitas Interactive.
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 Digitas Interactive business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Digitas Interactive is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Digitas Interactive 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.
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.
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 Digitas (A): Strategic Interactive Group 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 Digitas (A): Strategic Interactive Group 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 Digitas (A): Strategic Interactive Group 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 Digitas (A): Strategic Interactive Group 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 Digitas (A): Strategic Interactive Group 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 Digitas Interactive needs to make to build a sustainable competitive advantage.