Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Digital Equipment Corp.: The Kodak Outsourcing Agreement (A)
Describes grassroots effort which culminated in Digital's winning a competitive bid for the outsourcing of Kodak's internal telecommunications business. Describes the "Telstar" project, from the initial identification of the business opportunity to the process of crafting a partnership contract. Discussion topics include obtaining managerial and peer support, mobilizing informal networks, building an ad hoc team, managing relationships across organizational boundaries, and planning the transition from project team to ongoing operations. As the case ends, a key player must be replaced and a decision must be made concerning which Digital group will manage the new business. Russ Gullotti, the Digital executive who has overseen this effort considers how to help the team achieve a successful contract negotiation and subsequent transition to operations. Should also prompt discussion about leadership under ambiguity and management of innovation.
Authors :: Lynda M. Applegate, Herminia Ibarra, Keri Ostrofsky
Swot Analysis of "Digital Equipment Corp.: The Kodak Outsourcing Agreement (A)" written by Lynda M. Applegate, Herminia Ibarra, Keri Ostrofsky includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Digital Gullotti facing as an external strategic factors. Some of the topics covered in Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) case study are - Strategic Management Strategies, Innovation, Joint ventures, Leading teams, Negotiations, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) casestudy better are - – talent flight as more people leaving formal jobs, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Digital Equipment Corp.: The Kodak Outsourcing Agreement (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Digital Gullotti, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Digital Gullotti 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 Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) can be done for the following purposes –
1. Strategic planning using facts provided in Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) case study
2. Improving business portfolio management of Digital Gullotti
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 Digital Gullotti
Strengths Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Digital Gullotti in Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Digital Gullotti in the sector have low bargaining power. Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Digital Gullotti to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Digital Gullotti 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.
Superior customer experience
– The customer experience strategy of Digital Gullotti in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Digital Gullotti 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 Lynda M. Applegate, Herminia Ibarra, Keri Ostrofsky 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.
Operational resilience
– The operational resilience strategy in the Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Digital Gullotti digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Digital Gullotti 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.
High brand equity
– Digital Gullotti has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Digital Gullotti to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Technology & Operations field
– Digital Gullotti 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 Digital Gullotti in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Digital Gullotti
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Digital Gullotti does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Digital Gullotti 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
– Digital Gullotti is one of the leading recruiters in the industry. Managers in the Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Technology & Operations industry
– Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) firm has clearly differentiated products in the market place. This has enabled Digital Gullotti to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Digital Gullotti to invest into research and development (R&D) and innovation.
Weaknesses Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) are -
High operating costs
– Compare to the competitors, firm in the HBR case study Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) 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 Digital Gullotti 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynda M. Applegate, Herminia Ibarra, Keri Ostrofsky suggests that, Digital Gullotti 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 Digital Gullotti is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Digital Gullotti needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Digital Gullotti to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Digital Gullotti, firm in the HBR case study Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Digital Gullotti 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.
Interest costs
– Compare to the competition, Digital Gullotti 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.
Need for greater diversity
– Digital Gullotti 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Digital Gullotti 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.
Slow to strategic competitive environment developments
– As Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) HBR case study mentions - Digital Gullotti 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 cash cycle compare to competitors
Digital Gullotti 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Digital Gullotti is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) | 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 Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) are -
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. Digital Gullotti can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Digital Gullotti can use these opportunities to build new business models that can help the communities that Digital Gullotti operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Learning at scale
– Online learning technologies has now opened space for Digital Gullotti 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.
Developing new processes and practices
– Digital Gullotti 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.
Better consumer reach
– The expansion of the 5G network will help Digital Gullotti to increase its market reach. Digital Gullotti 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Digital Gullotti 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 Digital Gullotti to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Digital Gullotti 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 Digital Gullotti 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.
Leveraging digital technologies
– Digital Gullotti 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Digital Gullotti can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Digital Gullotti 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.
Creating value in data economy
– The success of analytics program of Digital Gullotti has opened avenues for new revenue streams for the organization in the industry. This can help Digital Gullotti to build a more holistic ecosystem as suggested in the Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) case study. Digital Gullotti can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Digital Gullotti 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. Digital Gullotti 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.
Threats Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Digital Gullotti 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Digital Equipment Corp.: The Kodak Outsourcing Agreement (A), Digital Gullotti 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 .
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. Digital Gullotti needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Digital Gullotti business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Digital Gullotti has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Digital Gullotti 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.
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 Digital Gullotti.
Environmental challenges
– Digital Gullotti 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. Digital Gullotti can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 Digital Gullotti in the Technology & Operations sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Digital Gullotti 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.
Shortening product life cycle
– it is one of the major threat that Digital Gullotti is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Digital Gullotti can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) 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 Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) 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 Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) 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 Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) 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 Digital Equipment Corp.: The Kodak Outsourcing Agreement (A) 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 Digital Gullotti needs to make to build a sustainable competitive advantage.