R.R. Donnelley & Sons: The Digital Division SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of R.R. Donnelley & Sons: The Digital Division
In June 1995, Barbara Schetter, VP and general manager of R.R. Donnelley's Digital Division, is struggling to gain acceptance from other groups and divisions at the printing giant. The Digital Division employs radically new technology--digital printing presses and transactions management systems--to deliver short-run, customized printing. But it is based on a completely different business model than Donnelley's traditional businesses and is finding it difficult to overcome informal resistance.
Swot Analysis of "R.R. Donnelley & Sons: The Digital Division" written by David A. Garvin, Artemis March includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Printing Donnelley's facing as an external strategic factors. Some of the topics covered in R.R. Donnelley & Sons: The Digital Division case study are - Strategic Management Strategies, Business processes, Disruptive innovation, Growth strategy, IT, Organizational culture and Technology & Operations.
Some of the macro environment factors that can be used to understand the R.R. Donnelley & Sons: The Digital Division casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, wage bills are increasing, talent flight as more people leaving formal jobs, increasing energy prices, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of R.R. Donnelley & Sons: The Digital Division
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in R.R. Donnelley & Sons: The Digital Division case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Printing Donnelley's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Printing Donnelley's 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 R.R. Donnelley & Sons: The Digital Division can be done for the following purposes –
1. Strategic planning using facts provided in R.R. Donnelley & Sons: The Digital Division case study
2. Improving business portfolio management of Printing Donnelley's
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Printing Donnelley's
Strengths R.R. Donnelley & Sons: The Digital Division | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Printing Donnelley's in R.R. Donnelley & Sons: The Digital Division Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Printing Donnelley's 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 Printing Donnelley's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Printing Donnelley's 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 R.R. Donnelley & Sons: The Digital Division HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the R.R. Donnelley & Sons: The Digital Division 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.
Successful track record of launching new products
– Printing Donnelley's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Printing Donnelley's 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.
Training and development
– Printing Donnelley's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in R.R. Donnelley & Sons: The Digital Division 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Printing Donnelley's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Printing Donnelley's 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.
Strong track record of project management
– Printing Donnelley's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Printing Donnelley's 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 R.R. Donnelley & Sons: The Digital Division - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Printing Donnelley's is one of the most innovative firm in sector. Manager in R.R. Donnelley & Sons: The Digital Division Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Printing Donnelley's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Printing Donnelley's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Printing Donnelley's 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 David A. Garvin, Artemis March 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.
Ability to recruit top talent
– Printing Donnelley's is one of the leading recruiters in the industry. Managers in the R.R. Donnelley & Sons: The Digital Division are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses R.R. Donnelley & Sons: The Digital Division | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of R.R. Donnelley & Sons: The Digital Division are -
Capital Spending Reduction
– Even during the low interest decade, Printing Donnelley's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study R.R. Donnelley & Sons: The Digital Division, is just above the industry average. Printing Donnelley's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study R.R. Donnelley & Sons: The Digital Division, in the dynamic environment Printing Donnelley's has struggled to respond to the nimble upstart competition. Printing Donnelley's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Printing Donnelley's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As R.R. Donnelley & Sons: The Digital Division HBR case study mentions - Printing Donnelley's 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the R.R. Donnelley & Sons: The Digital Division 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 Printing Donnelley's has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Printing Donnelley's 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.
High bargaining power of channel partners
– Because of the regulatory requirements, David A. Garvin, Artemis March suggests that, Printing Donnelley's 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.
Increasing silos among functional specialists
– The organizational structure of Printing Donnelley's is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Printing Donnelley's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Printing Donnelley's to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study R.R. Donnelley & Sons: The Digital Division, it seems that the employees of Printing Donnelley's 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.
No frontier risks strategy
– After analyzing the HBR case study R.R. Donnelley & Sons: The Digital Division, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities R.R. Donnelley & Sons: The Digital Division | 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 R.R. Donnelley & Sons: The Digital Division are -
Leveraging digital technologies
– Printing Donnelley's 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.
Using analytics as competitive advantage
– Printing Donnelley's 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 R.R. Donnelley & Sons: The Digital Division - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Printing Donnelley's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Printing Donnelley's 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 Printing Donnelley's to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Printing Donnelley's can use these opportunities to build new business models that can help the communities that Printing Donnelley's operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Buying journey improvements
– Printing Donnelley's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. R.R. Donnelley & Sons: The Digital Division 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Printing Donnelley's is facing challenges because of the dominance of functional experts in the organization. R.R. Donnelley & Sons: The Digital Division 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.
Manufacturing automation
– Printing Donnelley's can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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 Printing Donnelley's 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.
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 Printing Donnelley's in the consumer business. Now Printing Donnelley's can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Printing Donnelley's 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, R.R. Donnelley & Sons: The Digital Division, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Printing Donnelley's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Printing Donnelley's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Printing Donnelley's to increase its market reach. Printing Donnelley's 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.
Threats R.R. Donnelley & Sons: The Digital Division External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study R.R. Donnelley & Sons: The Digital Division are -
Environmental challenges
– Printing Donnelley's 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. Printing Donnelley's can take advantage of this fund but it will also bring new competitors in the Technology & Operations 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 R.R. Donnelley & Sons: The Digital Division, Printing Donnelley's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Technology acceleration in Forth Industrial Revolution
– Printing Donnelley's has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Printing Donnelley's needs to keep up with the evolution of technology in the Technology & Operations 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.
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.
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. Printing Donnelley's needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Increasing wage structure of Printing Donnelley's
– 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 Printing Donnelley's.
Stagnating economy with rate increase
– Printing Donnelley's 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.
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 Printing Donnelley's in the Technology & Operations sector and impact the bottomline of the organization.
Consumer confidence and its impact on Printing Donnelley's 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 Printing Donnelley's business can come under increasing regulations regarding data privacy, data security, etc.
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. Printing Donnelley's 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 dependence on third party suppliers
– Printing Donnelley's 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.
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 Printing Donnelley's.
Weighted SWOT Analysis of R.R. Donnelley & Sons: The Digital Division 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 R.R. Donnelley & Sons: The Digital Division 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 R.R. Donnelley & Sons: The Digital Division 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 R.R. Donnelley & Sons: The Digital Division 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 R.R. Donnelley & Sons: The Digital Division 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 Printing Donnelley's needs to make to build a sustainable competitive advantage.