Case Study Description of ToyWorld, Inc.: Information Technology Planning
ToyWorld, a fast growing retailer, was revitalizing its information technology (IT) infrastructure and called in AT&T to help plan for the future. Five strategic alternatives for use of information and communications technology were identified through value chain analysis and use of proprietary AT&T methodology. While two could be implemented by ToyWorld action alone, two would require external cooperation, and one represented an entirely new (but related) line of business.
Swot Analysis of "ToyWorld, Inc.: Information Technology Planning" written by Lynda M. Applegate includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Toyworld Information facing as an external strategic factors. Some of the topics covered in ToyWorld, Inc.: Information Technology Planning case study are - Strategic Management Strategies, IT, Joint ventures, Operations management, Strategic planning and Technology & Operations.
Some of the macro environment factors that can be used to understand the ToyWorld, Inc.: Information Technology Planning casestudy better are - – increasing transportation and logistics costs, supply chains are disrupted by pandemic , there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models,
digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of ToyWorld, Inc.: Information Technology Planning
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ToyWorld, Inc.: Information Technology Planning case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Toyworld Information, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Toyworld Information 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 ToyWorld, Inc.: Information Technology Planning can be done for the following purposes –
1. Strategic planning using facts provided in ToyWorld, Inc.: Information Technology Planning case study
2. Improving business portfolio management of Toyworld Information
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 Toyworld Information
Strengths ToyWorld, Inc.: Information Technology Planning | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Toyworld Information in ToyWorld, Inc.: Information Technology Planning Harvard Business Review case study are -
Strong track record of project management
– Toyworld Information is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Toyworld Information 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.
Operational resilience
– The operational resilience strategy in the ToyWorld, Inc.: Information Technology Planning 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 Toyworld Information digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Toyworld Information 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.
Diverse revenue streams
– Toyworld Information is present in almost all the verticals within the industry. This has provided firm in ToyWorld, Inc.: Information Technology Planning 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.
Training and development
– Toyworld Information has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ToyWorld, Inc.: Information Technology Planning Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Toyworld Information 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 ToyWorld, Inc.: Information Technology Planning - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Toyworld Information is one of the most innovative firm in sector. Manager in ToyWorld, Inc.: Information Technology Planning 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 Toyworld Information in the sector have low bargaining power. ToyWorld, Inc.: Information Technology Planning has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Toyworld Information to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Toyworld Information in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Toyworld Information has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in ToyWorld, Inc.: Information Technology Planning HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Toyworld Information has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Toyworld Information 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.
Weaknesses ToyWorld, Inc.: Information Technology Planning | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ToyWorld, Inc.: Information Technology Planning are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ToyWorld, Inc.: Information Technology Planning, is just above the industry average. Toyworld Information 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.
Low market penetration in new markets
– Outside its home market of Toyworld Information, firm in the HBR case study ToyWorld, Inc.: Information Technology Planning needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Toyworld Information 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 decision making process
– As mentioned earlier in the report, Toyworld Information 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. Toyworld Information 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.
No frontier risks strategy
– After analyzing the HBR case study ToyWorld, Inc.: Information Technology Planning, 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.
Slow to strategic competitive environment developments
– As ToyWorld, Inc.: Information Technology Planning HBR case study mentions - Toyworld Information 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.
Products dominated business model
– Even though Toyworld Information 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 - ToyWorld, Inc.: Information Technology Planning should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ToyWorld, Inc.: Information Technology Planning, in the dynamic environment Toyworld Information has struggled to respond to the nimble upstart competition. Toyworld Information has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Toyworld Information 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.
Need for greater diversity
– Toyworld Information 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.
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 Toyworld Information supply chain. Even after few cautionary changes mentioned in the HBR case study - ToyWorld, Inc.: Information Technology Planning, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Toyworld Information vulnerable to further global disruptions in South East Asia.
Opportunities ToyWorld, Inc.: Information Technology Planning | 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 ToyWorld, Inc.: Information Technology Planning are -
Buying journey improvements
– Toyworld Information can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ToyWorld, Inc.: Information Technology Planning suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Toyworld Information has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study ToyWorld, Inc.: Information Technology Planning - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Toyworld Information to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Toyworld Information can use these opportunities to build new business models that can help the communities that Toyworld Information operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Better consumer reach
– The expansion of the 5G network will help Toyworld Information to increase its market reach. Toyworld Information 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Toyworld Information is facing challenges because of the dominance of functional experts in the organization. ToyWorld, Inc.: Information Technology Planning 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Toyworld Information 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, ToyWorld, Inc.: Information Technology Planning, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Toyworld Information 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Toyworld Information 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.
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 Toyworld Information 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.
Developing new processes and practices
– Toyworld Information 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Toyworld Information 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.
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 Toyworld Information in the consumer business. Now Toyworld Information can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Toyworld Information can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats ToyWorld, Inc.: Information Technology Planning External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ToyWorld, Inc.: Information Technology Planning are -
High dependence on third party suppliers
– Toyworld Information 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.
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. Toyworld Information needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Toyworld Information 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 ToyWorld, Inc.: Information Technology Planning .
Shortening product life cycle
– it is one of the major threat that Toyworld Information is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ToyWorld, Inc.: Information Technology Planning, Toyworld Information 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 .
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 Toyworld Information.
Technology acceleration in Forth Industrial Revolution
– Toyworld Information has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Toyworld Information 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.
Environmental challenges
– Toyworld Information 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. Toyworld Information 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 Toyworld Information in the Technology & Operations sector and impact the bottomline of the organization.
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 Toyworld Information business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Toyworld Information 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.
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. Toyworld Information 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 ToyWorld, Inc.: Information Technology Planning 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 ToyWorld, Inc.: Information Technology Planning 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 ToyWorld, Inc.: Information Technology Planning 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 ToyWorld, Inc.: Information Technology Planning 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 ToyWorld, Inc.: Information Technology Planning 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 Toyworld Information needs to make to build a sustainable competitive advantage.
