Case Study Description of Exploration vs. Exploitation, Module Note
This module note introduces James March's concept of exploration and exploitation, and the management challenge of balancing the allocation of resources to the two activities in the firm. The note also touches on the O'Reilly and Tushman paper on the ambidextrous organization, and mentions some of the other literature.
Swot Analysis of "Exploration vs. Exploitation, Module Note" written by Willy Shih includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Exploitation Exploration facing as an external strategic factors. Some of the topics covered in Exploration vs. Exploitation, Module Note case study are - Strategic Management Strategies, IT, Knowledge management, Leadership, Manufacturing, Marketing, Product development, Strategic planning and Technology & Operations.
Some of the macro environment factors that can be used to understand the Exploration vs. Exploitation, Module Note casestudy better are - – increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
supply chains are disrupted by pandemic , technology disruption, etc
Introduction to SWOT Analysis of Exploration vs. Exploitation, Module Note
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Exploration vs. Exploitation, Module Note case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Exploitation Exploration, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Exploitation Exploration 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 Exploration vs. Exploitation, Module Note can be done for the following purposes –
1. Strategic planning using facts provided in Exploration vs. Exploitation, Module Note case study
2. Improving business portfolio management of Exploitation Exploration
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 Exploitation Exploration
Strengths Exploration vs. Exploitation, Module Note | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Exploitation Exploration in Exploration vs. Exploitation, Module Note Harvard Business Review case study are -
High brand equity
– Exploitation Exploration has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Exploitation Exploration to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Exploitation Exploration 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 Exploration vs. Exploitation, Module Note - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Exploitation Exploration is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Technology & Operations industry
– Exploration vs. Exploitation, Module Note firm has clearly differentiated products in the market place. This has enabled Exploitation Exploration to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Exploitation Exploration to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Exploitation Exploration is one of the leading recruiters in the industry. Managers in the Exploration vs. Exploitation, Module Note are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Exploitation Exploration is present in almost all the verticals within the industry. This has provided firm in Exploration vs. Exploitation, Module Note 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.
Successful track record of launching new products
– Exploitation Exploration has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Exploitation Exploration 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.
Analytics focus
– Exploitation Exploration 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 Willy Shih 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 lead change in Technology & Operations field
– Exploitation Exploration 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 Exploitation Exploration in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Exploitation Exploration 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 Exploitation Exploration is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Exploration vs. Exploitation, Module Note Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Exploitation Exploration
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Exploitation Exploration does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Exploitation Exploration 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.
Weaknesses Exploration vs. Exploitation, Module Note | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Exploration vs. Exploitation, Module Note are -
Capital Spending Reduction
– Even during the low interest decade, Exploitation Exploration 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.
Increasing silos among functional specialists
– The organizational structure of Exploitation Exploration is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Exploitation Exploration needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Exploitation Exploration to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Exploitation Exploration 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Exploitation Exploration 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Willy Shih suggests that, Exploitation Exploration is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Exploration vs. Exploitation, Module Note 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 Exploitation Exploration has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Exploration vs. Exploitation, Module Note, 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.
Skills based hiring
– The stress on hiring functional specialists at Exploitation Exploration 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Exploration vs. Exploitation, Module Note 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 Exploitation Exploration 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Exploitation Exploration, firm in the HBR case study Exploration vs. Exploitation, Module Note needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Exploration vs. Exploitation, Module Note, it seems that the employees of Exploitation Exploration 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.
Opportunities Exploration vs. Exploitation, Module Note | 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 Exploration vs. Exploitation, Module Note are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Exploitation Exploration 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, Exploration vs. Exploitation, Module Note, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Exploitation Exploration can use these opportunities to build new business models that can help the communities that Exploitation Exploration operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Leveraging digital technologies
– Exploitation Exploration 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.
Creating value in data economy
– The success of analytics program of Exploitation Exploration has opened avenues for new revenue streams for the organization in the industry. This can help Exploitation Exploration to build a more holistic ecosystem as suggested in the Exploration vs. Exploitation, Module Note case study. Exploitation Exploration can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Exploitation Exploration 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. Exploitation Exploration can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Exploitation Exploration 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.
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 Exploitation Exploration in the consumer business. Now Exploitation Exploration can target international markets with far fewer capital restrictions requirements than the existing system.
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. Exploitation Exploration can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Exploitation Exploration 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.
Manufacturing automation
– Exploitation Exploration 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Exploitation Exploration is facing challenges because of the dominance of functional experts in the organization. Exploration vs. Exploitation, Module Note 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Exploitation Exploration can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Exploration vs. Exploitation, Module Note External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Exploration vs. Exploitation, Module Note are -
Environmental challenges
– Exploitation Exploration 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. Exploitation Exploration can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 Exploitation Exploration business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Exploitation Exploration
– 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 Exploitation Exploration.
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.
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 Exploitation Exploration in the Technology & Operations sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Exploration vs. Exploitation, Module Note, Exploitation Exploration 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
– Exploitation Exploration has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Exploitation Exploration 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.
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. Exploitation Exploration 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.
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.
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 Exploitation Exploration.
Stagnating economy with rate increase
– Exploitation Exploration 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.
High dependence on third party suppliers
– Exploitation Exploration 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.
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. Exploitation Exploration 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 Exploration vs. Exploitation, Module Note 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 Exploration vs. Exploitation, Module Note 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 Exploration vs. Exploitation, Module Note 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 Exploration vs. Exploitation, Module Note 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 Exploration vs. Exploitation, Module Note 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 Exploitation Exploration needs to make to build a sustainable competitive advantage.
