3M Taiwan: Product Innovation in the Subsidiary SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of 3M Taiwan: Product Innovation in the Subsidiary
On January 17, 2005, the function head in the Health Care Business in 3M Taiwan, found himself in a meeting with the Acne Dressing project team. In 2004, the function head initiated a project team to exploit local market needs for 3M Hydrocolloid Dressing, a technology that existed in the company for many years without any practical applications. The local project team suggested applying the material for acne treatment. The product would be known as Acne Dressing. There was no standardized solution for acne treatment in Taiwan. If developed, Acne Dressing would be a brand new product in the local market. The biggest challenge would be how to change local consumer behaviors on new acne treatment products. In addition, since there were no similar products in the market, the project team only had limited information. The potential sales and volume estimation were all uncertain. If the local development were to be launched, Acne Dressing would be 3M's first product application from Hydrocolloid Dressing technology. With little previous experience in product development and no similar products existing in the market, the function head had to decide fast whether to proceed with this new product development. Should the team carry on with the project? If so, what options did the local project team have? What kind of resources and support should the local Health Care business segment seek from the headquarters for the product development? Should the local product development collaborate with other subsidiaries?
Swot Analysis of "3M Taiwan: Product Innovation in the Subsidiary" written by Christopher Williams, Liaw Emily includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Acne Dressing facing as an external strategic factors. Some of the topics covered in 3M Taiwan: Product Innovation in the Subsidiary case study are - Strategic Management Strategies, Innovation, International business, Project management, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the 3M Taiwan: Product Innovation in the Subsidiary casestudy better are - – there is backlash against globalization, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing government debt because of Covid-19 spendings, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of 3M Taiwan: Product Innovation in the Subsidiary
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in 3M Taiwan: Product Innovation in the Subsidiary case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Acne Dressing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Acne Dressing 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 3M Taiwan: Product Innovation in the Subsidiary can be done for the following purposes –
1. Strategic planning using facts provided in 3M Taiwan: Product Innovation in the Subsidiary case study
2. Improving business portfolio management of Acne Dressing
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 Acne Dressing
Strengths 3M Taiwan: Product Innovation in the Subsidiary | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Acne Dressing in 3M Taiwan: Product Innovation in the Subsidiary Harvard Business Review case study are -
Diverse revenue streams
– Acne Dressing is present in almost all the verticals within the industry. This has provided firm in 3M Taiwan: Product Innovation in the Subsidiary 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
- Acne Dressing 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 Acne Dressing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in 3M Taiwan: Product Innovation in the Subsidiary Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Acne Dressing 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.
High brand equity
– Acne Dressing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Acne Dressing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Acne Dressing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Acne Dressing 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.
Strong track record of project management
– Acne Dressing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Acne Dressing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in 3M Taiwan: Product Innovation in the Subsidiary 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.
Operational resilience
– The operational resilience strategy in the 3M Taiwan: Product Innovation in the Subsidiary 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.
Ability to lead change in Strategy & Execution field
– Acne Dressing 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 Acne Dressing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Acne Dressing is one of the most innovative firm in sector. Manager in 3M Taiwan: Product Innovation in the Subsidiary Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Acne Dressing 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 3M Taiwan: Product Innovation in the Subsidiary - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Acne Dressing is one of the leading recruiters in the industry. Managers in the 3M Taiwan: Product Innovation in the Subsidiary are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses 3M Taiwan: Product Innovation in the Subsidiary | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 3M Taiwan: Product Innovation in the Subsidiary are -
Workers concerns about automation
– As automation is fast increasing in the segment, Acne Dressing 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.
Aligning sales with marketing
– It come across in the case study 3M Taiwan: Product Innovation in the Subsidiary 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 3M Taiwan: Product Innovation in the Subsidiary can leverage the sales team experience to cultivate customer relationships as Acne Dressing 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 3M Taiwan: Product Innovation in the Subsidiary, in the dynamic environment Acne Dressing has struggled to respond to the nimble upstart competition. Acne Dressing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the 3M Taiwan: Product Innovation in the Subsidiary HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Acne Dressing has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study 3M Taiwan: Product Innovation in the Subsidiary, 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.
Capital Spending Reduction
– Even during the low interest decade, Acne Dressing 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.
Increasing silos among functional specialists
– The organizational structure of Acne Dressing is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Acne Dressing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Acne Dressing 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 Acne Dressing supply chain. Even after few cautionary changes mentioned in the HBR case study - 3M Taiwan: Product Innovation in the Subsidiary, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Acne Dressing vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Acne Dressing, firm in the HBR case study 3M Taiwan: Product Innovation in the Subsidiary needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study 3M Taiwan: Product Innovation in the Subsidiary, is just above the industry average. Acne Dressing 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.
Slow to strategic competitive environment developments
– As 3M Taiwan: Product Innovation in the Subsidiary HBR case study mentions - Acne Dressing 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.
Opportunities 3M Taiwan: Product Innovation in the Subsidiary | 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 3M Taiwan: Product Innovation in the Subsidiary are -
Better consumer reach
– The expansion of the 5G network will help Acne Dressing to increase its market reach. Acne Dressing 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Acne Dressing 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 Acne Dressing to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Acne Dressing is facing challenges because of the dominance of functional experts in the organization. 3M Taiwan: Product Innovation in the Subsidiary 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Acne Dressing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Acne Dressing 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Acne Dressing can use these opportunities to build new business models that can help the communities that Acne Dressing operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Acne Dressing 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.
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 Acne Dressing in the consumer business. Now Acne Dressing can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Acne Dressing 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.
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. Acne Dressing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Acne Dressing 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.
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. Acne Dressing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Acne Dressing 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.
Threats 3M Taiwan: Product Innovation in the Subsidiary External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study 3M Taiwan: Product Innovation in the Subsidiary are -
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. Acne Dressing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Acne Dressing has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Acne Dressing 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.
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 Acne Dressing in the Strategy & Execution sector and impact the bottomline 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 Acne Dressing.
Environmental challenges
– Acne Dressing 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. Acne Dressing 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 Acne Dressing 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.
Regulatory challenges
– Acne Dressing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Acne Dressing 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 3M Taiwan: Product Innovation in the Subsidiary .
Shortening product life cycle
– it is one of the major threat that Acne Dressing is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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. Acne Dressing 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.
Increasing wage structure of Acne Dressing
– 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 Acne Dressing.
Stagnating economy with rate increase
– Acne Dressing 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.
Weighted SWOT Analysis of 3M Taiwan: Product Innovation in the Subsidiary 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 3M Taiwan: Product Innovation in the Subsidiary 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 3M Taiwan: Product Innovation in the Subsidiary 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 3M Taiwan: Product Innovation in the Subsidiary 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 3M Taiwan: Product Innovation in the Subsidiary 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 Acne Dressing needs to make to build a sustainable competitive advantage.
