Newlight Technologies: Plastics for a Carbon Negative Future SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Newlight Technologies: Plastics for a Carbon Negative Future
The Newlight Technologies case is set at the end of 2013. Newlight has been awarded the Innovation Prize for Biomaterial of the Year by nova-Institut GmbH at the Cologne International Conference on Industrial Biotechnology and Bio-based Plastics & Composites. The company has a small-scale pilot plant using enzyme catalysts to produce a bioplastic resin, PHA, which has a wide range of applications for products in the plastics industry. The pilot plant can produce enough resin to perform product trials for a number of end-users at the same time. The innovative process is the fruit of ten years' research and the result promises to be one of the first biopolymers to be economically competitive with petro-chemical based products on price and performance. The case provides details of the global industry, giving scope and scale information for businesses along the value chain, including market segmentation and resin pricing.
Swot Analysis of "Newlight Technologies: Plastics for a Carbon Negative Future" written by Daina Mazutis, Daniel Day includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Newlight Resin facing as an external strategic factors. Some of the topics covered in Newlight Technologies: Plastics for a Carbon Negative Future case study are - Strategic Management Strategies, Innovation, Strategy, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Newlight Technologies: Plastics for a Carbon Negative Future casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc
Introduction to SWOT Analysis of Newlight Technologies: Plastics for a Carbon Negative Future
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Newlight Technologies: Plastics for a Carbon Negative Future case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Newlight Resin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Newlight Resin 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 Newlight Technologies: Plastics for a Carbon Negative Future can be done for the following purposes –
1. Strategic planning using facts provided in Newlight Technologies: Plastics for a Carbon Negative Future case study
2. Improving business portfolio management of Newlight Resin
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 Newlight Resin
Strengths Newlight Technologies: Plastics for a Carbon Negative Future | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Newlight Resin in Newlight Technologies: Plastics for a Carbon Negative Future Harvard Business Review case study are -
Ability to recruit top talent
– Newlight Resin is one of the leading recruiters in the industry. Managers in the Newlight Technologies: Plastics for a Carbon Negative Future are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Newlight Resin 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Newlight Technologies: Plastics for a Carbon Negative Future firm has clearly differentiated products in the market place. This has enabled Newlight Resin to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Newlight Resin to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Newlight Resin 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 Newlight Resin in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Newlight Resin has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Newlight Resin has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Newlight Resin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Newlight Resin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Newlight Resin in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Newlight Resin is present in almost all the verticals within the industry. This has provided firm in Newlight Technologies: Plastics for a Carbon Negative Future 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.
Highly skilled collaborators
– Newlight Resin 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 Newlight Technologies: Plastics for a Carbon Negative Future HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Newlight Resin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Newlight Resin 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.
Training and development
– Newlight Resin has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Newlight Technologies: Plastics for a Carbon Negative Future 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.
Strong track record of project management
– Newlight Resin 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 Newlight Technologies: Plastics for a Carbon Negative Future | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Newlight Technologies: Plastics for a Carbon Negative Future are -
Aligning sales with marketing
– It come across in the case study Newlight Technologies: Plastics for a Carbon Negative Future 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 Newlight Technologies: Plastics for a Carbon Negative Future can leverage the sales team experience to cultivate customer relationships as Newlight Resin is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Newlight Technologies: Plastics for a Carbon Negative Future, in the dynamic environment Newlight Resin has struggled to respond to the nimble upstart competition. Newlight Resin has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Newlight Resin 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.
Slow decision making process
– As mentioned earlier in the report, Newlight Resin 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. Newlight Resin 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.
Low market penetration in new markets
– Outside its home market of Newlight Resin, firm in the HBR case study Newlight Technologies: Plastics for a Carbon Negative Future needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Newlight Resin 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 - Newlight Technologies: Plastics for a Carbon Negative Future should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Newlight Resin 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.
High cash cycle compare to competitors
Newlight Resin 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.
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 Newlight Resin supply chain. Even after few cautionary changes mentioned in the HBR case study - Newlight Technologies: Plastics for a Carbon Negative Future, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Newlight Resin vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Newlight Resin is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Newlight Resin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Newlight Resin to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Newlight Resin 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.
Opportunities Newlight Technologies: Plastics for a Carbon Negative Future | 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 Newlight Technologies: Plastics for a Carbon Negative Future are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Newlight Resin 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 Newlight Resin to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Newlight Resin 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Newlight Resin can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Newlight Resin 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Newlight Resin is facing challenges because of the dominance of functional experts in the organization. Newlight Technologies: Plastics for a Carbon Negative Future 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.
Manufacturing automation
– Newlight Resin 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.
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 Newlight Resin 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.
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. Newlight Resin 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. Newlight Resin 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.
Developing new processes and practices
– Newlight Resin 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.
Leveraging digital technologies
– Newlight Resin 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Newlight Resin can use these opportunities to build new business models that can help the communities that Newlight Resin 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 Newlight Resin to increase its market reach. Newlight Resin 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.
Using analytics as competitive advantage
– Newlight Resin has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Newlight Technologies: Plastics for a Carbon Negative Future - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Newlight Resin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Newlight Technologies: Plastics for a Carbon Negative Future External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Newlight Technologies: Plastics for a Carbon Negative Future are -
Environmental challenges
– Newlight Resin 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. Newlight Resin can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Newlight Resin 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 Newlight Resin is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Newlight Technologies: Plastics for a Carbon Negative Future, Newlight Resin 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 .
Regulatory challenges
– Newlight Resin 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.
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. Newlight Resin 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.
Stagnating economy with rate increase
– Newlight Resin 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.
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.
Consumer confidence and its impact on Newlight Resin 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.
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 Newlight Resin.
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 Newlight Resin in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Newlight Resin 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 Newlight Technologies: Plastics for a Carbon Negative Future .
Weighted SWOT Analysis of Newlight Technologies: Plastics for a Carbon Negative Future 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 Newlight Technologies: Plastics for a Carbon Negative Future 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 Newlight Technologies: Plastics for a Carbon Negative Future 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 Newlight Technologies: Plastics for a Carbon Negative Future 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 Newlight Technologies: Plastics for a Carbon Negative Future 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 Newlight Resin needs to make to build a sustainable competitive advantage.