Case Study Description of Stainless Steel Studios, Inc.
Stainless Steel Studios is the latest entrepreneurial venture of renowned computer game designer Rick Goodman. Goodman must now decide the role of customer feedback in crafting the next generation of computer games. This case addresses how operations systems can be designed to manage significant uncertainty.
Authors :: Jonathan West, Christian G. Kasper, Michael Buttrey, S. Robert Goldman
Swot Analysis of "Stainless Steel Studios, Inc." written by Jonathan West, Christian G. Kasper, Michael Buttrey, S. Robert Goldman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Goodman Stainless facing as an external strategic factors. Some of the topics covered in Stainless Steel Studios, Inc. case study are - Strategic Management Strategies, Managing uncertainty, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Stainless Steel Studios, Inc. casestudy better are - – central banks are concerned over increasing inflation, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, there is increasing trade war between United States & China, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Stainless Steel Studios, Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Stainless Steel Studios, Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Goodman Stainless, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Goodman Stainless 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 Stainless Steel Studios, Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Stainless Steel Studios, Inc. case study
2. Improving business portfolio management of Goodman Stainless
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 Goodman Stainless
Strengths Stainless Steel Studios, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Goodman Stainless in Stainless Steel Studios, Inc. Harvard Business Review case study are -
High switching costs
– The high switching costs that Goodman Stainless 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.
Sustainable margins compare to other players in Technology & Operations industry
– Stainless Steel Studios, Inc. firm has clearly differentiated products in the market place. This has enabled Goodman Stainless to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Goodman Stainless to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Goodman Stainless 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 Stainless Steel Studios, Inc. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Goodman Stainless has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Stainless Steel Studios, Inc. 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.
Low bargaining power of suppliers
– Suppliers of Goodman Stainless in the sector have low bargaining power. Stainless Steel Studios, Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Goodman Stainless to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Goodman Stainless 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 Jonathan West, Christian G. Kasper, Michael Buttrey, S. Robert Goldman 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.
Successful track record of launching new products
– Goodman Stainless has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Goodman Stainless 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.
Organizational Resilience of Goodman Stainless
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Goodman Stainless 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 Goodman Stainless 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Goodman Stainless digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Goodman Stainless 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.
Strong track record of project management
– Goodman Stainless is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Goodman Stainless 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 Goodman Stainless is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Stainless Steel Studios, Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Stainless Steel Studios, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Stainless Steel Studios, Inc. are -
Interest costs
– Compare to the competition, Goodman Stainless 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.
Slow to strategic competitive environment developments
– As Stainless Steel Studios, Inc. HBR case study mentions - Goodman Stainless 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Stainless Steel Studios, Inc., in the dynamic environment Goodman Stainless has struggled to respond to the nimble upstart competition. Goodman Stainless has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Stainless Steel Studios, Inc. that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Stainless Steel Studios, Inc. can leverage the sales team experience to cultivate customer relationships as Goodman Stainless is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Goodman Stainless 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Stainless Steel Studios, Inc. 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 Goodman Stainless has relatively successful track record of launching new products.
Lack of clear differentiation of Goodman Stainless products
– To increase the profitability and margins on the products, Goodman Stainless needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Stainless Steel Studios, Inc., it seems that the employees of Goodman Stainless 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Stainless Steel Studios, Inc. 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 Goodman Stainless 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Stainless Steel Studios, Inc., 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.
Low market penetration in new markets
– Outside its home market of Goodman Stainless, firm in the HBR case study Stainless Steel Studios, Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Stainless Steel Studios, Inc. | 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 Stainless Steel Studios, Inc. are -
Better consumer reach
– The expansion of the 5G network will help Goodman Stainless to increase its market reach. Goodman Stainless 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.
Buying journey improvements
– Goodman Stainless can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Stainless Steel Studios, Inc. 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.
Manufacturing automation
– Goodman Stainless 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.
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. Goodman Stainless can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Goodman Stainless can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Goodman Stainless has opened avenues for new revenue streams for the organization in the industry. This can help Goodman Stainless to build a more holistic ecosystem as suggested in the Stainless Steel Studios, Inc. case study. Goodman Stainless can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Goodman Stainless 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Goodman Stainless 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, Stainless Steel Studios, Inc., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Goodman Stainless 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 Stainless Steel Studios, Inc. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Goodman Stainless to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Goodman Stainless is facing challenges because of the dominance of functional experts in the organization. Stainless Steel Studios, Inc. 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.
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. Goodman Stainless 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. Goodman Stainless 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.
Leveraging digital technologies
– Goodman Stainless 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.
Learning at scale
– Online learning technologies has now opened space for Goodman Stainless to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Stainless Steel Studios, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Stainless Steel Studios, Inc. are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Goodman Stainless with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Goodman Stainless 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.
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. Goodman Stainless 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.
Environmental challenges
– Goodman Stainless 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. Goodman Stainless can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 Stainless Steel Studios, Inc., Goodman Stainless 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 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 Goodman Stainless in the Technology & Operations sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Goodman Stainless is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Goodman Stainless 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 Stainless Steel Studios, Inc. .
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 Goodman Stainless.
Regulatory challenges
– Goodman Stainless 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Goodman Stainless 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.
Weighted SWOT Analysis of Stainless Steel Studios, Inc. 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 Stainless Steel Studios, Inc. 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 Stainless Steel Studios, Inc. 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 Stainless Steel Studios, Inc. 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 Stainless Steel Studios, Inc. 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 Goodman Stainless needs to make to build a sustainable competitive advantage.
