Daktronics (F): Weathering the Recession Positioned for a Bright Future SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Daktronics (F): Weathering the Recession Positioned for a Bright Future
The Daktronics ("Dak") case draws attention to what a company can do in the midst of recessionary forces when sales have declined significantly and the company's leadership position may be headed for additional erosion. The case is as of FYE 2010 (May) and examines this B2B firm which is the leading score board design and manufacturing firm. Dak has significant opportunity in various countries abroad, but when and where the company should undertake additional strategic action is not clear. The company's executive team and board confront increasing competition and press pressure. Should the firm wait out the recession or undertake a bold strategic move? Founded in South Dakota by two South Dakota State University engineering professors. Dak produces videographic displays plus related products and services that lead in the sports arena market installations and have applications across a variety of institutional and commercial markets. Among the commercial markets that offer opportunities are digital business advertising venues. To date, the firm has pursued a conservative, but path-breaking technology leadership position in its market. Dak is a B2B case that provides examples of applications which will be of interest to and useful with both graduate and undergraduate level students.
Authors :: Marilyn L Taylor, Theresa T Coates, Charles C Connely
Swot Analysis of "Daktronics (F): Weathering the Recession Positioned for a Bright Future" written by Marilyn L Taylor, Theresa T Coates, Charles C Connely includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dak Daktronics facing as an external strategic factors. Some of the topics covered in Daktronics (F): Weathering the Recession Positioned for a Bright Future case study are - Strategic Management Strategies, Competition, Mergers & acquisitions, Recession and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Daktronics (F): Weathering the Recession Positioned for a Bright Future casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, there is backlash against globalization, supply chains are disrupted by pandemic , increasing commodity prices, increasing energy prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Daktronics (F): Weathering the Recession Positioned for a Bright Future
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Daktronics (F): Weathering the Recession Positioned for a Bright Future case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dak Daktronics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dak Daktronics 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future can be done for the following purposes –
1. Strategic planning using facts provided in Daktronics (F): Weathering the Recession Positioned for a Bright Future case study
2. Improving business portfolio management of Dak Daktronics
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 Dak Daktronics
Strengths Daktronics (F): Weathering the Recession Positioned for a Bright Future | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dak Daktronics in Daktronics (F): Weathering the Recession Positioned for a Bright Future Harvard Business Review case study are -
Strong track record of project management
– Dak Daktronics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Dak Daktronics 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.
Successful track record of launching new products
– Dak Daktronics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dak Daktronics 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Daktronics (F): Weathering the Recession Positioned for a Bright Future firm has clearly differentiated products in the market place. This has enabled Dak Daktronics to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Dak Daktronics to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Dak Daktronics 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 Dak Daktronics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Dak Daktronics in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Dak Daktronics is present in almost all the verticals within the industry. This has provided firm in Daktronics (F): Weathering the Recession Positioned for a Bright Future 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.
Training and development
– Dak Daktronics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Daktronics (F): Weathering the Recession Positioned for a Bright Future 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.
High switching costs
– The high switching costs that Dak Daktronics 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.
Effective Research and Development (R&D)
– Dak Daktronics 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Dak Daktronics is one of the leading recruiters in the industry. Managers in the Daktronics (F): Weathering the Recession Positioned for a Bright Future are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Dak Daktronics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dak Daktronics 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.
Weaknesses Daktronics (F): Weathering the Recession Positioned for a Bright Future | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daktronics (F): Weathering the Recession Positioned for a Bright Future 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 Dak Daktronics supply chain. Even after few cautionary changes mentioned in the HBR case study - Daktronics (F): Weathering the Recession Positioned for a Bright Future, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dak Daktronics vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Daktronics (F): Weathering the Recession Positioned for a Bright Future 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 Dak Daktronics 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Daktronics (F): Weathering the Recession Positioned for a Bright Future, it seems that the employees of Dak Daktronics don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Dak Daktronics 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.
Interest costs
– Compare to the competition, Dak Daktronics 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.
Slow decision making process
– As mentioned earlier in the report, Dak Daktronics 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. Dak Daktronics 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.
Products dominated business model
– Even though Dak Daktronics 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 - Daktronics (F): Weathering the Recession Positioned for a Bright Future should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Daktronics (F): Weathering the Recession Positioned for a Bright Future 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future can leverage the sales team experience to cultivate customer relationships as Dak Daktronics is planning to shift buying processes online.
Lack of clear differentiation of Dak Daktronics products
– To increase the profitability and margins on the products, Dak Daktronics needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Dak Daktronics 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dak Daktronics is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Daktronics (F): Weathering the Recession Positioned for a Bright Future can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Daktronics (F): Weathering the Recession Positioned for a Bright Future | 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dak Daktronics 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 Dak Daktronics to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Dak Daktronics 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dak Daktronics can use these opportunities to build new business models that can help the communities that Dak Daktronics operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Dak Daktronics 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 Dak Daktronics 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.
Developing new processes and practices
– Dak Daktronics 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.
Better consumer reach
– The expansion of the 5G network will help Dak Daktronics to increase its market reach. Dak Daktronics 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.
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. Dak Daktronics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dak Daktronics 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.
Learning at scale
– Online learning technologies has now opened space for Dak Daktronics 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.
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. Dak Daktronics 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. Dak Daktronics 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.
Buying journey improvements
– Dak Daktronics can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Daktronics (F): Weathering the Recession Positioned for a Bright Future 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.
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. Dak Daktronics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Daktronics (F): Weathering the Recession Positioned for a Bright Future External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Daktronics (F): Weathering the Recession Positioned for a Bright Future 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.
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. Dak Daktronics 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.
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. Dak Daktronics needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Dak Daktronics has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Dak Daktronics 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.
Stagnating economy with rate increase
– Dak Daktronics 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dak Daktronics 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.
Shortening product life cycle
– it is one of the major threat that Dak Daktronics is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Dak Daktronics 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dak Daktronics 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dak Daktronics with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Dak Daktronics 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.
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 Dak Daktronics in the Strategy & Execution sector and impact the bottomline 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. Dak Daktronics 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future 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 Daktronics (F): Weathering the Recession Positioned for a Bright Future 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 Dak Daktronics needs to make to build a sustainable competitive advantage.
