Case Study Description of D-Orbit: Keeping The Thermosphere Clean
D-Orbit is an entrepreneurial start-up operating in the aerospace industry, developing a technology for the controlled removal of end-of-life debris from space. The case focuses on the nexus between strategy and (space) sustainability.The emphasis of this case is given to the role of the private sector (in this case entrepreneurial start-ups) in tackling sustainability issues by converting them into opportunities for profits.The case triggers discussions on the tension between market imperatives (the extent to which the solution proposed by D-Orbit offers more value to customers than alternative solutions) and sustainability problems (in this case, "the tragedy of the commons" and issues related to moral hazards) and stimulates reflections on the role the private sector can play in achieving a sustainable future.In order to achieve these objectives, the case presents a challenge faced by Luca Rossettini, founder and president of D-Orbit Srl: whether increasing skepticism on the part of would-be investors concerning the robustness of the current business model (and its customer value proposition) is a signal of possible problems which are worthy of attention and rigorous strategic analysis, or whether it is simply due to a lack of familiarity with the industry, as some of Luca's colleagues suspect. Luca and his team believe that the principal benefit of D-Orbit for satellite operators is that it will allow them to prolong the life cycle of a satellite, saving the propellant destined to be used for de-orbiting maneuvers by the on-board propulsion system. This represents a considerable opportunity cost for satellite operators. However, investors seem worried that the same operations could be performed simply by enlarging the existing on-board propellant tank to carry more fuel. Is this a viable alternative? Is it potentially more attractive to customers? What other benefits might D-Orbit offer?An analysis of the case will progressively lead to discussing possible configurations of the aerospace industry, as well as D-Orbit's main competitors and substitute technologies. It will also lead to a comparison of the three main alternatives from the view point of incremental analysis (i.e. incremental benefits and incremental costs). These are: the situation as is, D-Orbit and enlarging the propellant tank. Such an analysis will help students to realize that, while from a customer's perspective D-Orbit does not offer comparatively strong benefits with respect to viable alternatives, from a sustainability standpoint the solution proposed by D-Orbit offers a way to avoid the tragedy of the commons in space sustainability by eliminating satellite operators' incentives to misbehave.
Authors :: Gregor Pipan, Armen Tiraturyan, Lorenzo Massa, Mike Rosenberg
Swot Analysis of "D-Orbit: Keeping The Thermosphere Clean" written by Gregor Pipan, Armen Tiraturyan, Lorenzo Massa, Mike Rosenberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Orbit Propellant facing as an external strategic factors. Some of the topics covered in D-Orbit: Keeping The Thermosphere Clean case study are - Strategic Management Strategies, Strategy, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the D-Orbit: Keeping The Thermosphere Clean casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
talent flight as more people leaving formal jobs, technology disruption, etc
Introduction to SWOT Analysis of D-Orbit: Keeping The Thermosphere Clean
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in D-Orbit: Keeping The Thermosphere Clean case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Orbit Propellant, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Orbit Propellant 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 D-Orbit: Keeping The Thermosphere Clean can be done for the following purposes –
1. Strategic planning using facts provided in D-Orbit: Keeping The Thermosphere Clean case study
2. Improving business portfolio management of Orbit Propellant
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 Orbit Propellant
Strengths D-Orbit: Keeping The Thermosphere Clean | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Orbit Propellant in D-Orbit: Keeping The Thermosphere Clean Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Orbit Propellant in the sector have low bargaining power. D-Orbit: Keeping The Thermosphere Clean has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Orbit Propellant to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Orbit Propellant 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 Orbit Propellant is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in D-Orbit: Keeping The Thermosphere Clean Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Orbit Propellant is one of the leading recruiters in the industry. Managers in the D-Orbit: Keeping The Thermosphere Clean are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Orbit Propellant 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 switching costs
– The high switching costs that Orbit Propellant 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.
Operational resilience
– The operational resilience strategy in the D-Orbit: Keeping The Thermosphere Clean 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.
Ability to lead change in Strategy & Execution field
– Orbit Propellant 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 Orbit Propellant in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Orbit Propellant 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 D-Orbit: Keeping The Thermosphere Clean HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Orbit Propellant is one of the most innovative firm in sector. Manager in D-Orbit: Keeping The Thermosphere Clean Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Orbit Propellant 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 Gregor Pipan, Armen Tiraturyan, Lorenzo Massa, Mike Rosenberg 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.
Effective Research and Development (R&D)
– Orbit Propellant 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 D-Orbit: Keeping The Thermosphere Clean - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Orbit Propellant is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses D-Orbit: Keeping The Thermosphere Clean | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of D-Orbit: Keeping The Thermosphere Clean are -
Products dominated business model
– Even though Orbit Propellant 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 - D-Orbit: Keeping The Thermosphere Clean should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As D-Orbit: Keeping The Thermosphere Clean HBR case study mentions - Orbit Propellant 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study D-Orbit: Keeping The Thermosphere Clean, in the dynamic environment Orbit Propellant has struggled to respond to the nimble upstart competition. Orbit Propellant has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Orbit Propellant 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.
Aligning sales with marketing
– It come across in the case study D-Orbit: Keeping The Thermosphere Clean 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 D-Orbit: Keeping The Thermosphere Clean can leverage the sales team experience to cultivate customer relationships as Orbit Propellant is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Orbit Propellant, firm in the HBR case study D-Orbit: Keeping The Thermosphere Clean needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the D-Orbit: Keeping The Thermosphere Clean 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 Orbit Propellant has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study D-Orbit: Keeping The Thermosphere Clean 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 Orbit Propellant 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Gregor Pipan, Armen Tiraturyan, Lorenzo Massa, Mike Rosenberg suggests that, Orbit Propellant 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.
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 Orbit Propellant supply chain. Even after few cautionary changes mentioned in the HBR case study - D-Orbit: Keeping The Thermosphere Clean, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Orbit Propellant vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Orbit Propellant 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.
Opportunities D-Orbit: Keeping The Thermosphere Clean | 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 D-Orbit: Keeping The Thermosphere Clean are -
Building a culture of innovation
– managers at Orbit Propellant 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Orbit Propellant 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 Orbit Propellant to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Orbit Propellant 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.
Creating value in data economy
– The success of analytics program of Orbit Propellant has opened avenues for new revenue streams for the organization in the industry. This can help Orbit Propellant to build a more holistic ecosystem as suggested in the D-Orbit: Keeping The Thermosphere Clean case study. Orbit Propellant can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Orbit Propellant in the consumer business. Now Orbit Propellant can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Orbit Propellant 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Orbit Propellant 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Orbit Propellant 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, D-Orbit: Keeping The Thermosphere Clean, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Orbit Propellant to increase its market reach. Orbit Propellant 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.
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. Orbit Propellant 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. Orbit Propellant 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.
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. Orbit Propellant can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Orbit Propellant 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
– Orbit Propellant 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 D-Orbit: Keeping The Thermosphere Clean - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Orbit Propellant to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats D-Orbit: Keeping The Thermosphere Clean External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study D-Orbit: Keeping The Thermosphere Clean are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Orbit Propellant 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.
Stagnating economy with rate increase
– Orbit Propellant 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Orbit Propellant with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Orbit Propellant 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 D-Orbit: Keeping The Thermosphere Clean .
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. Orbit Propellant 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.
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 Orbit Propellant business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Orbit Propellant is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Orbit Propellant
– 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 Orbit Propellant.
Regulatory challenges
– Orbit Propellant 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
– Orbit Propellant 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.
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.
Consumer confidence and its impact on Orbit Propellant 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.
Environmental challenges
– Orbit Propellant 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. Orbit Propellant can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of D-Orbit: Keeping The Thermosphere Clean 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 D-Orbit: Keeping The Thermosphere Clean 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 D-Orbit: Keeping The Thermosphere Clean 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 D-Orbit: Keeping The Thermosphere Clean 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 D-Orbit: Keeping The Thermosphere Clean 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 Orbit Propellant needs to make to build a sustainable competitive advantage.
