General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A)
Designed to generate discussion on the issues of outsourcing from the perspective of a firm thinking about turning over its IS activities to a third-party vendor.
Swot Analysis of "General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A)" written by F. Warren McFarlan, Katherine N. Seger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Outsourcing Vendor facing as an external strategic factors. Some of the topics covered in General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) case study are - Strategic Management Strategies, Change management, Costs, Emerging markets, IT, Managing people, Strategy execution, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) casestudy better are - – increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Outsourcing Vendor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Outsourcing Vendor 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 General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) can be done for the following purposes –
1. Strategic planning using facts provided in General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) case study
2. Improving business portfolio management of Outsourcing Vendor
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 Outsourcing Vendor
Strengths General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Outsourcing Vendor in General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Outsourcing Vendor in the sector have low bargaining power. General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Outsourcing Vendor to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Outsourcing Vendor 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 General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (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.
Cross disciplinary teams
– Horizontal connected teams at the Outsourcing Vendor 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.
Strong track record of project management
– Outsourcing Vendor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Outsourcing Vendor is present in almost all the verticals within the industry. This has provided firm in General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) 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.
High brand equity
– Outsourcing Vendor has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Outsourcing Vendor to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Outsourcing Vendor is one of the most innovative firm in sector. Manager in General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Technology & Operations industry
– General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) firm has clearly differentiated products in the market place. This has enabled Outsourcing Vendor to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Outsourcing Vendor to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Outsourcing Vendor 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.
Successful track record of launching new products
– Outsourcing Vendor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Outsourcing Vendor 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.
Ability to lead change in Technology & Operations field
– Outsourcing Vendor 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 Outsourcing Vendor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) are -
Need for greater diversity
– Outsourcing Vendor 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Outsourcing Vendor is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (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.
Products dominated business model
– Even though Outsourcing Vendor has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Outsourcing Vendor 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.
Interest costs
– Compare to the competition, Outsourcing Vendor 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, F. Warren McFarlan, Katherine N. Seger suggests that, Outsourcing Vendor 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 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 Outsourcing Vendor supply chain. Even after few cautionary changes mentioned in the HBR case study - General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Outsourcing Vendor vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A), is just above the industry average. Outsourcing Vendor 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.
Skills based hiring
– The stress on hiring functional specialists at Outsourcing Vendor has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Outsourcing Vendor 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A), it seems that the employees of Outsourcing Vendor 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 General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (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 General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) are -
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. Outsourcing Vendor can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Outsourcing Vendor 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.
Creating value in data economy
– The success of analytics program of Outsourcing Vendor has opened avenues for new revenue streams for the organization in the industry. This can help Outsourcing Vendor to build a more holistic ecosystem as suggested in the General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) case study. Outsourcing Vendor can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Outsourcing Vendor 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.
Developing new processes and practices
– Outsourcing Vendor 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.
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. Outsourcing Vendor can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Outsourcing Vendor 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Outsourcing Vendor is facing challenges because of the dominance of functional experts in the organization. General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) 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.
Loyalty marketing
– Outsourcing Vendor 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.
Better consumer reach
– The expansion of the 5G network will help Outsourcing Vendor to increase its market reach. Outsourcing Vendor 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.
Building a culture of innovation
– managers at Outsourcing Vendor 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 Outsourcing Vendor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Outsourcing Vendor in the consumer business. Now Outsourcing Vendor can target international markets with far fewer capital restrictions requirements than the existing system.
Threats General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A) are -
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.
Increasing wage structure of Outsourcing Vendor
– 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 Outsourcing Vendor.
Consumer confidence and its impact on Outsourcing Vendor 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (A), Outsourcing Vendor 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Outsourcing Vendor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Outsourcing Vendor 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.
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 Outsourcing Vendor in the Technology & Operations sector and impact the bottomline of the organization.
Regulatory challenges
– Outsourcing Vendor 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.
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 Outsourcing Vendor business can come under increasing regulations regarding data privacy, data security, etc.
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 Outsourcing Vendor.
Stagnating economy with rate increase
– Outsourcing Vendor 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Outsourcing Vendor 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.
Weighted SWOT Analysis of General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (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 General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (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 General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (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 General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (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 General Dynamics and Computer Sciences Corp.: Outsourcing the IS Function (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 Outsourcing Vendor needs to make to build a sustainable competitive advantage.