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 government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, technology disruption, there is backlash against globalization, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels,
increasing energy prices, there is increasing trade war between United States & China, 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 -
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.
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.
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.
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.
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.
Organizational Resilience of Orbit Propellant
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Orbit Propellant does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Orbit Propellant has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Orbit Propellant 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.
High brand equity
– Orbit Propellant has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Orbit Propellant to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Orbit Propellant has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in D-Orbit: Keeping The Thermosphere Clean 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.
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.
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.
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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Orbit Propellant 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Orbit Propellant 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.
Capital Spending Reduction
– Even during the low interest decade, Orbit Propellant 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Orbit Propellant is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study D-Orbit: Keeping The Thermosphere Clean 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 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.
Lack of clear differentiation of Orbit Propellant products
– To increase the profitability and margins on the products, Orbit Propellant needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study D-Orbit: Keeping The Thermosphere Clean, is just above the industry average. Orbit Propellant needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Orbit Propellant is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Orbit Propellant needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Orbit Propellant to focus more on services rather than just following the product oriented approach.
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 -
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.
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.
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. Orbit Propellant can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Orbit Propellant 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.
Leveraging digital technologies
– Orbit Propellant 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.
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.
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.
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.
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 Orbit Propellant to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. 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.
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.
Buying journey improvements
– Orbit Propellant can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. D-Orbit: Keeping The Thermosphere Clean 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.
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.
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 -
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study D-Orbit: Keeping The Thermosphere Clean, Orbit Propellant 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 .
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 acceleration in Forth Industrial Revolution
– Orbit Propellant has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Orbit Propellant 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.
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. Orbit Propellant needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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.
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.