What Every CEO Needs to Know About Nonmarket Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, technology disruption, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings,
increasing energy prices, increasing household debt because of falling income levels, 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 -
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.
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.
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.
High switching costs
– The high switching costs that Nonmarket Actors 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.
Low bargaining power of suppliers
– Suppliers of Nonmarket Actors in the sector have low bargaining power. What Every CEO Needs to Know About Nonmarket Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nonmarket Actors to manage not only supply disruptions but also source products at highly competitive prices.
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.
Innovation driven organization
– Nonmarket Actors is one of the most innovative firm in sector. Manager in What Every CEO Needs to Know About Nonmarket Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– 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.
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.
Operational resilience
– The operational resilience strategy in the What Every CEO Needs to Know About Nonmarket Strategy 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.
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 -
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.
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.
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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nonmarket Actors is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study What Every CEO Needs to Know About Nonmarket Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Nonmarket Actors has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, David Bach, David Allen suggests that, Nonmarket Actors 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 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.
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.
Products dominated business model
– Even though Nonmarket Actors 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 - What Every CEO Needs to Know About Nonmarket Strategy should strive to include more intangible value offerings along with its core products and services.
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 -
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.
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.
Creating value in data economy
– The success of analytics program of Nonmarket Actors has opened avenues for new revenue streams for the organization in the industry. This can help Nonmarket Actors to build a more holistic ecosystem as suggested in the What Every CEO Needs to Know About Nonmarket Strategy case study. Nonmarket Actors can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Nonmarket Actors 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.
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.
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. Nonmarket Actors 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 Nonmarket Actors 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nonmarket Actors 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, What Every CEO Needs to Know About Nonmarket Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Nonmarket Actors in the consumer business. Now Nonmarket Actors can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nonmarket Actors 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 Nonmarket Actors to hire the very best people irrespective of their geographical location.
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.
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 -
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study What Every CEO Needs to Know About Nonmarket Strategy, Nonmarket Actors 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nonmarket Actors 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nonmarket Actors 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 What Every CEO Needs to Know About Nonmarket Strategy .
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.
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.
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.
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.
Environmental challenges
– Nonmarket Actors 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. Nonmarket Actors can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Nonmarket Actors can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
