What Every CEO Needs to Know About Nonmarket Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of What Every CEO Needs to Know About Nonmarket Strategy
This is an MIT Sloan Management Review article. Business strategy begins with operations, the competitive landscape and markets. But David Bach and David B. Allen of the IE Business School Center for Nonmarket Strategy argue that strategy should not end there. Rather, a robust nonmarket strategy that addresses government regulation, political and social movements, even activist opposition should figure strongly in any strategy. Nonmarket strategy starts with the premise that issues and actors "beyond the market" affect the bottom line. Which nonmarkets are most important? That depends on the key issues a company confronts. By identifying key issues, and then the actors who are shaping them, a company can begin to shape the nonmarket -- a crucial approach when the issue is core to the underlying market as well.
Swot Analysis of "What Every CEO Needs to Know About Nonmarket Strategy" written by David Bach, David Allen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nonmarket Actors facing as an external strategic factors. Some of the topics covered in What Every CEO Needs to Know About Nonmarket Strategy case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the What Every CEO Needs to Know About Nonmarket Strategy casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, wage bills are increasing, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of What Every CEO Needs to Know About Nonmarket Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in What Every CEO Needs to Know About Nonmarket Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nonmarket Actors, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nonmarket Actors 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 What Every CEO Needs to Know About Nonmarket Strategy can be done for the following purposes –
1. Strategic planning using facts provided in What Every CEO Needs to Know About Nonmarket Strategy case study
2. Improving business portfolio management of Nonmarket Actors
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 Nonmarket Actors
Strengths What Every CEO Needs to Know About Nonmarket Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nonmarket Actors in What Every CEO Needs to Know About Nonmarket Strategy Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– What Every CEO Needs to Know About Nonmarket Strategy firm has clearly differentiated products in the market place. This has enabled Nonmarket Actors to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Nonmarket Actors to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Nonmarket Actors 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 What Every CEO Needs to Know About Nonmarket Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Nonmarket Actors has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nonmarket Actors to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Nonmarket Actors is one of the leading recruiters in the industry. Managers in the What Every CEO Needs to Know About Nonmarket Strategy 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 Nonmarket Actors 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.
Training and development
– Nonmarket Actors has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in What Every CEO Needs to Know About Nonmarket Strategy 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.
Organizational Resilience of Nonmarket Actors
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nonmarket Actors does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Nonmarket Actors 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 Nonmarket Actors in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Nonmarket Actors is present in almost all the verticals within the industry. This has provided firm in What Every CEO Needs to Know About Nonmarket Strategy 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.
Successful track record of launching new products
– Nonmarket Actors has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nonmarket Actors 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.
Highly skilled collaborators
– Nonmarket Actors 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 What Every CEO Needs to Know About Nonmarket Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Nonmarket Actors 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 Nonmarket Actors is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in What Every CEO Needs to Know About Nonmarket Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses What Every CEO Needs to Know About Nonmarket Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of What Every CEO Needs to Know About Nonmarket Strategy are -
Slow decision making process
– As mentioned earlier in the report, Nonmarket Actors 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. Nonmarket Actors 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.
High operating costs
– Compare to the competitors, firm in the HBR case study What Every CEO Needs to Know About Nonmarket Strategy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nonmarket Actors 's lucrative customers.
Aligning sales with marketing
– It come across in the case study What Every CEO Needs to Know About Nonmarket Strategy 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 What Every CEO Needs to Know About Nonmarket Strategy can leverage the sales team experience to cultivate customer relationships as Nonmarket Actors is planning to shift buying processes online.
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 Nonmarket Actors supply chain. Even after few cautionary changes mentioned in the HBR case study - What Every CEO Needs to Know About Nonmarket Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nonmarket Actors vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Nonmarket Actors 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.
Slow to strategic competitive environment developments
– As What Every CEO Needs to Know About Nonmarket Strategy HBR case study mentions - Nonmarket Actors 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.
Lack of clear differentiation of Nonmarket Actors products
– To increase the profitability and margins on the products, Nonmarket Actors needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Nonmarket Actors 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study What Every CEO Needs to Know About Nonmarket Strategy, in the dynamic environment Nonmarket Actors has struggled to respond to the nimble upstart competition. Nonmarket Actors has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Nonmarket Actors 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 star products
– The top 2 products and services of the firm as mentioned in the What Every CEO Needs to Know About Nonmarket Strategy 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 Nonmarket Actors has relatively successful track record of launching new products.
Opportunities What Every CEO Needs to Know About Nonmarket Strategy | 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 What Every CEO Needs to Know About Nonmarket Strategy are -
Manufacturing automation
– Nonmarket Actors 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nonmarket Actors 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.
Developing new processes and practices
– Nonmarket Actors 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.
Buying journey improvements
– Nonmarket Actors can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. What Every CEO Needs to Know About Nonmarket Strategy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nonmarket Actors is facing challenges because of the dominance of functional experts in the organization. What Every CEO Needs to Know About Nonmarket Strategy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nonmarket Actors 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.
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. Nonmarket Actors 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. Nonmarket Actors 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.
Leveraging digital technologies
– Nonmarket Actors 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.
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. Nonmarket Actors can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nonmarket Actors can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Nonmarket Actors 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.
Using analytics as competitive advantage
– Nonmarket Actors 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 What Every CEO Needs to Know About Nonmarket Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nonmarket Actors to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nonmarket Actors can use these opportunities to build new business models that can help the communities that Nonmarket Actors operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats What Every CEO Needs to Know About Nonmarket Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study What Every CEO Needs to Know About Nonmarket Strategy are -
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.
Regulatory challenges
– Nonmarket Actors 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.
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. Nonmarket Actors needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Nonmarket Actors in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Nonmarket Actors 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nonmarket Actors with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Nonmarket Actors
– 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 Nonmarket Actors.
Shortening product life cycle
– it is one of the major threat that Nonmarket Actors is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Nonmarket Actors can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Nonmarket Actors 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.
Technology acceleration in Forth Industrial Revolution
– Nonmarket Actors has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nonmarket Actors 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.
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 Nonmarket Actors business can come under increasing regulations regarding data privacy, data security, etc.
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. Nonmarket Actors 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.
Weighted SWOT Analysis of What Every CEO Needs to Know About Nonmarket Strategy 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 What Every CEO Needs to Know About Nonmarket Strategy 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 What Every CEO Needs to Know About Nonmarket Strategy 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 What Every CEO Needs to Know About Nonmarket Strategy 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 What Every CEO Needs to Know About Nonmarket Strategy 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 Nonmarket Actors needs to make to build a sustainable competitive advantage.