Chaparral Steel: Rapid Product and Process Development SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Chaparral Steel: Rapid Product and Process Development
One of the nation's foremost mini-mills' core competence is the rapid realization of technology into products. This case describes the development of a highly innovative casting technique and features the role of the company's culture in achieving its goals. The company exemplifies a learning organization.
Swot Analysis of "Chaparral Steel: Rapid Product and Process Development" written by Dorothy Leonard-Barton, Gil Preuss includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chaparral Rapid facing as an external strategic factors. Some of the topics covered in Chaparral Steel: Rapid Product and Process Development case study are - Strategic Management Strategies, Manufacturing, Organizational culture, Product development, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the Chaparral Steel: Rapid Product and Process Development casestudy better are - – increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, there is backlash against globalization, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Chaparral Steel: Rapid Product and Process Development
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chaparral Steel: Rapid Product and Process Development case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chaparral Rapid, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chaparral Rapid 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 Chaparral Steel: Rapid Product and Process Development can be done for the following purposes –
1. Strategic planning using facts provided in Chaparral Steel: Rapid Product and Process Development case study
2. Improving business portfolio management of Chaparral Rapid
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 Chaparral Rapid
Strengths Chaparral Steel: Rapid Product and Process Development | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chaparral Rapid in Chaparral Steel: Rapid Product and Process Development Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– Chaparral Steel: Rapid Product and Process Development firm has clearly differentiated products in the market place. This has enabled Chaparral Rapid to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Chaparral Rapid to invest into research and development (R&D) and innovation.
Ability to lead change in Technology & Operations field
– Chaparral Rapid 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 Chaparral Rapid in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Chaparral Rapid 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
– Chaparral Rapid is one of the leading recruiters in the industry. Managers in the Chaparral Steel: Rapid Product and Process Development are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Chaparral Rapid is one of the most innovative firm in sector. Manager in Chaparral Steel: Rapid Product and Process Development Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Chaparral Rapid in the sector have low bargaining power. Chaparral Steel: Rapid Product and Process Development has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chaparral Rapid to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Chaparral Rapid 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.
Learning organization
- Chaparral Rapid 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 Chaparral Rapid is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Chaparral Steel: Rapid Product and Process Development Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Chaparral Rapid 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.
Operational resilience
– The operational resilience strategy in the Chaparral Steel: Rapid Product and Process Development 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.
Analytics focus
– Chaparral Rapid 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 Dorothy Leonard-Barton, Gil Preuss 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.
Diverse revenue streams
– Chaparral Rapid is present in almost all the verticals within the industry. This has provided firm in Chaparral Steel: Rapid Product and Process Development 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.
Weaknesses Chaparral Steel: Rapid Product and Process Development | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chaparral Steel: Rapid Product and Process Development are -
Capital Spending Reduction
– Even during the low interest decade, Chaparral Rapid 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 strategic competitive environment developments
– As Chaparral Steel: Rapid Product and Process Development HBR case study mentions - Chaparral Rapid 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 bargaining power of channel partners
– Because of the regulatory requirements, Dorothy Leonard-Barton, Gil Preuss suggests that, Chaparral Rapid 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chaparral Rapid is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Chaparral Steel: Rapid Product and Process Development can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Chaparral Rapid 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Chaparral Steel: Rapid Product and Process Development, in the dynamic environment Chaparral Rapid has struggled to respond to the nimble upstart competition. Chaparral Rapid has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Chaparral Rapid supply chain. Even after few cautionary changes mentioned in the HBR case study - Chaparral Steel: Rapid Product and Process Development, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chaparral Rapid vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Chaparral Rapid is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Chaparral Rapid needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chaparral Rapid to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Chaparral Rapid 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. Chaparral Rapid 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.
Need for greater diversity
– Chaparral Rapid 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.
Interest costs
– Compare to the competition, Chaparral Rapid 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 Chaparral Steel: Rapid Product and Process Development | 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 Chaparral Steel: Rapid Product and Process Development are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Chaparral Rapid 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Chaparral Rapid can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chaparral Rapid is facing challenges because of the dominance of functional experts in the organization. Chaparral Steel: Rapid Product and Process Development 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.
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 Chaparral Rapid in the consumer business. Now Chaparral Rapid can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Chaparral Rapid has opened avenues for new revenue streams for the organization in the industry. This can help Chaparral Rapid to build a more holistic ecosystem as suggested in the Chaparral Steel: Rapid Product and Process Development case study. Chaparral Rapid can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Chaparral Rapid 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.
Building a culture of innovation
– managers at Chaparral Rapid 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 Technology & Operations segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chaparral Rapid can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chaparral Rapid 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, Chaparral Steel: Rapid Product and Process Development, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chaparral Rapid 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. Chaparral Rapid 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.
Developing new processes and practices
– Chaparral Rapid can develop new processes and procedures in Technology & Operations 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.
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 Chaparral Rapid 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.
Learning at scale
– Online learning technologies has now opened space for Chaparral Rapid 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.
Threats Chaparral Steel: Rapid Product and Process Development External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chaparral Steel: Rapid Product and Process Development are -
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. Chaparral Rapid 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 Chaparral Rapid business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chaparral Rapid in the Technology & Operations industry. The Technology & Operations 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.
Technology acceleration in Forth Industrial Revolution
– Chaparral Rapid has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Chaparral Rapid 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Chaparral Rapid 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, Chaparral Rapid 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 Chaparral Steel: Rapid Product and Process Development .
Increasing wage structure of Chaparral Rapid
– 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 Chaparral Rapid.
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 Chaparral Rapid in the Technology & Operations sector and impact the bottomline of the organization.
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.
Regulatory challenges
– Chaparral Rapid 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 Technology & Operations industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Chaparral Steel: Rapid Product and Process Development, Chaparral Rapid 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 .
Environmental challenges
– Chaparral Rapid 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. Chaparral Rapid can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
High dependence on third party suppliers
– Chaparral Rapid 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.
Weighted SWOT Analysis of Chaparral Steel: Rapid Product and Process Development 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 Chaparral Steel: Rapid Product and Process Development 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 Chaparral Steel: Rapid Product and Process Development 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 Chaparral Steel: Rapid Product and Process Development 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 Chaparral Steel: Rapid Product and Process Development 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 Chaparral Rapid needs to make to build a sustainable competitive advantage.
