Case Study Description of Scenario-Based Strategy Maps
Strategy maps are designed to help execute strategy and bring predictive qualities to key performance indicators by linking them according to perceived cause-and-effect relationships. However, in our experience strategy maps are often extrapolations of past performance and are seldom sufficiently linked to possible future states. In this article, we argue that scenario analysis could play an important role in the design of strategy maps, as it is an effective method to look at the future. Through the development of scenarios, organizations can think creatively about possible discontinuous future states and can prepare themselves for multiple plausible futures, not only the one they expect to happen. Therefore, scenario-based strategy maps could enable organizations to face strategic uncertainty in a more effective way and make them more sustainable in the longer term. This article highlights the strengths and weaknesses of strategy maps and scenario analysis, and outlines a method to develop scenario-based strategy maps both in theory and by presenting a significant example.
Authors :: Frank Buytendijk, Toby Hatch, Pietro Micheli
Swot Analysis of "Scenario-Based Strategy Maps" written by Frank Buytendijk, Toby Hatch, Pietro Micheli includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Maps Scenario facing as an external strategic factors. Some of the topics covered in Scenario-Based Strategy Maps case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Scenario-Based Strategy Maps casestudy better are - – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, central banks are concerned over increasing inflation, there is backlash against globalization,
cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Scenario-Based Strategy Maps
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Scenario-Based Strategy Maps case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Maps Scenario, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Maps Scenario 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 Scenario-Based Strategy Maps can be done for the following purposes –
1. Strategic planning using facts provided in Scenario-Based Strategy Maps case study
2. Improving business portfolio management of Maps Scenario
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 Maps Scenario
Strengths Scenario-Based Strategy Maps | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Maps Scenario in Scenario-Based Strategy Maps Harvard Business Review case study are -
Strong track record of project management
– Maps Scenario 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
– Maps Scenario has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Scenario-Based Strategy Maps 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.
Innovation driven organization
– Maps Scenario is one of the most innovative firm in sector. Manager in Scenario-Based Strategy Maps Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Maps Scenario in the sector have low bargaining power. Scenario-Based Strategy Maps has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Maps Scenario to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Maps Scenario is present in almost all the verticals within the industry. This has provided firm in Scenario-Based Strategy Maps 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.
Ability to recruit top talent
– Maps Scenario is one of the leading recruiters in the industry. Managers in the Scenario-Based Strategy Maps are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Maps Scenario 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 Scenario-Based Strategy Maps - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Scenario-Based Strategy Maps firm has clearly differentiated products in the market place. This has enabled Maps Scenario to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Maps Scenario to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Maps Scenario in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Maps Scenario 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.
High brand equity
– Maps Scenario has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Maps Scenario to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Maps Scenario 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 Maps Scenario is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Scenario-Based Strategy Maps Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Scenario-Based Strategy Maps | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Scenario-Based Strategy Maps are -
Lack of clear differentiation of Maps Scenario products
– To increase the profitability and margins on the products, Maps Scenario needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Scenario-Based Strategy Maps 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 Maps Scenario has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Maps Scenario 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.
Capital Spending Reduction
– Even during the low interest decade, Maps Scenario 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.
Aligning sales with marketing
– It come across in the case study Scenario-Based Strategy Maps 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 Scenario-Based Strategy Maps can leverage the sales team experience to cultivate customer relationships as Maps Scenario is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Maps Scenario is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Scenario-Based Strategy Maps can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Frank Buytendijk, Toby Hatch, Pietro Micheli suggests that, Maps Scenario 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 Scenario-Based Strategy Maps HBR case study mentions - Maps Scenario 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.
Increasing silos among functional specialists
– The organizational structure of Maps Scenario is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Maps Scenario needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Maps Scenario to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Maps Scenario 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. Maps Scenario 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 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 Maps Scenario supply chain. Even after few cautionary changes mentioned in the HBR case study - Scenario-Based Strategy Maps, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Maps Scenario vulnerable to further global disruptions in South East Asia.
Opportunities Scenario-Based Strategy Maps | 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 Scenario-Based Strategy Maps are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Maps Scenario is facing challenges because of the dominance of functional experts in the organization. Scenario-Based Strategy Maps 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.
Creating value in data economy
– The success of analytics program of Maps Scenario has opened avenues for new revenue streams for the organization in the industry. This can help Maps Scenario to build a more holistic ecosystem as suggested in the Scenario-Based Strategy Maps case study. Maps Scenario can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Maps Scenario 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.
Building a culture of innovation
– managers at Maps Scenario 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.
Manufacturing automation
– Maps Scenario 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Maps Scenario 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 Maps Scenario to hire the very best people irrespective of their geographical location.
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 Maps Scenario in the consumer business. Now Maps Scenario can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Maps Scenario to increase its market reach. Maps Scenario 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Maps Scenario 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, Scenario-Based Strategy Maps, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Maps Scenario 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 Maps Scenario 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Maps Scenario 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
– Maps Scenario 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.
Threats Scenario-Based Strategy Maps External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Scenario-Based Strategy Maps are -
Increasing wage structure of Maps Scenario
– 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 Maps Scenario.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Maps Scenario 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 Scenario-Based Strategy Maps .
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.
Environmental challenges
– Maps Scenario 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. Maps Scenario can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Maps Scenario has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Maps Scenario 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.
Consumer confidence and its impact on Maps Scenario 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.
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 Maps Scenario business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Maps Scenario 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 dependence on third party suppliers
– Maps Scenario 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.
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. Maps Scenario needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Maps Scenario 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Scenario-Based Strategy Maps, Maps Scenario 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 .
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 Maps Scenario.
Weighted SWOT Analysis of Scenario-Based Strategy Maps 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 Scenario-Based Strategy Maps 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 Scenario-Based Strategy Maps 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 Scenario-Based Strategy Maps 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 Scenario-Based Strategy Maps 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 Maps Scenario needs to make to build a sustainable competitive advantage.