Should You Build Strategy Like You Build Software? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Should You Build Strategy Like You Build Software?
This is an MIT Sloan Management Review article. Strategy is a mechanism through which a company makes sense of the world around it. It is a collection of ideas about how the company intends to win, the source code upon which everything else depends. Because strategy captures a company's best thinking at a given point in time, the author argues that strategy, much like a software program, needs to be updated and refined as people gain new experience and knowledge. In traditional approaches to strategy development, the author argues, planning is optimized for the original targets; it is difficult to change directions once implementation is under way. Adaptive processes help companies create and adapt strategy quickly and iteratively, so people can triage issues and allocate resources in changing environments; they are optimized to identify the best ideas and to ensure that individuals throughout the organization have access to the latest version so that everyday actions can be aligned with the most important strategic insights. Since people throughout the organization play roles in the company's strategic success, strategy development needs to tap into ideas from everywhere. This requires opening the process to people throughout the organization, permitting extensive face-to-face collaboration, and arranging for individuals other than senior executives to facilitate important strategic discussions.
Swot Analysis of "Should You Build Strategy Like You Build Software?" written by Keith R. McFarland includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Optimized Ideas facing as an external strategic factors. Some of the topics covered in Should You Build Strategy Like You Build Software? case study are - Strategic Management Strategies, Leadership, Managing organizations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Should You Build Strategy Like You Build Software? casestudy better are - – increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, geopolitical disruptions, technology disruption, there is backlash against globalization,
banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Should You Build Strategy Like You Build Software?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Should You Build Strategy Like You Build Software? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Optimized Ideas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Optimized Ideas 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 Should You Build Strategy Like You Build Software? can be done for the following purposes –
1. Strategic planning using facts provided in Should You Build Strategy Like You Build Software? case study
2. Improving business portfolio management of Optimized Ideas
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 Optimized Ideas
Strengths Should You Build Strategy Like You Build Software? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Optimized Ideas in Should You Build Strategy Like You Build Software? Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Optimized Ideas 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 Optimized Ideas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Optimized Ideas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Optimized Ideas 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.
Analytics focus
– Optimized Ideas is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Keith R. McFarland can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Optimized Ideas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Optimized Ideas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Optimized Ideas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Optimized Ideas in the sector have low bargaining power. Should You Build Strategy Like You Build Software? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Optimized Ideas to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Optimized Ideas is one of the leading recruiters in the industry. Managers in the Should You Build Strategy Like You Build Software? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Optimized Ideas 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 Optimized Ideas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Should You Build Strategy Like You Build Software? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Optimized Ideas in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Optimized Ideas is present in almost all the verticals within the industry. This has provided firm in Should You Build Strategy Like You Build Software? 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Optimized Ideas digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Optimized Ideas has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Optimized Ideas 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.
Weaknesses Should You Build Strategy Like You Build Software? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Should You Build Strategy Like You Build Software? are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Optimized Ideas is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Should You Build Strategy Like You Build Software? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Optimized Ideas has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Increasing silos among functional specialists
– The organizational structure of Optimized Ideas is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Optimized Ideas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Optimized Ideas to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Optimized Ideas 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 decision making process
– As mentioned earlier in the report, Optimized Ideas 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. Optimized Ideas 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.
Lack of clear differentiation of Optimized Ideas products
– To increase the profitability and margins on the products, Optimized Ideas needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Should You Build Strategy Like You Build Software? 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 Optimized Ideas 's lucrative customers.
Products dominated business model
– Even though Optimized Ideas 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 - Should You Build Strategy Like You Build Software? should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Should You Build Strategy Like You Build Software? HBR case study mentions - Optimized Ideas 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.
Interest costs
– Compare to the competition, Optimized Ideas 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.
Skills based hiring
– The stress on hiring functional specialists at Optimized Ideas has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities Should You Build Strategy Like You Build Software? | 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 Should You Build Strategy Like You Build Software? are -
Better consumer reach
– The expansion of the 5G network will help Optimized Ideas to increase its market reach. Optimized Ideas 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Optimized Ideas is facing challenges because of the dominance of functional experts in the organization. Should You Build Strategy Like You Build Software? 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Optimized Ideas can use these opportunities to build new business models that can help the communities that Optimized Ideas operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Optimized Ideas in the consumer business. Now Optimized Ideas can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Optimized Ideas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Optimized Ideas can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Should You Build Strategy Like You Build Software? 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.
Developing new processes and practices
– Optimized Ideas 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.
Using analytics as competitive advantage
– Optimized Ideas 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 Should You Build Strategy Like You Build Software? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Optimized Ideas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Optimized Ideas can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Optimized Ideas 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Optimized Ideas 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.
Leveraging digital technologies
– Optimized Ideas 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.
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. Optimized Ideas 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. Optimized Ideas 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.
Threats Should You Build Strategy Like You Build Software? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Should You Build Strategy Like You Build Software? are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Optimized Ideas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Optimized Ideas.
Stagnating economy with rate increase
– Optimized Ideas 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.
Increasing wage structure of Optimized Ideas
– 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 Optimized Ideas.
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.
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.
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. Optimized Ideas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Optimized Ideas 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. Optimized Ideas needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Optimized Ideas 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 Should You Build Strategy Like You Build Software? .
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. Optimized Ideas 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.
Consumer confidence and its impact on Optimized Ideas 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 Optimized Ideas business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Should You Build Strategy Like You Build Software? 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 Should You Build Strategy Like You Build Software? 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 Should You Build Strategy Like You Build Software? 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 Should You Build Strategy Like You Build Software? 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 Should You Build Strategy Like You Build Software? 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 Optimized Ideas needs to make to build a sustainable competitive advantage.
