Case Study Description of Raychem Corp.: Interconnection Systems Division
Describes the highly successful efforts of a management team to turn around the performance of a $30 million Raychem division that manufactures electronic connectors. The original manufacturing system was a batch operation, with a broad product line, high inventories, and slow throughput time. Describes the process of converting the operation to a low-inventory, just-in-time plant, organized by manufacturing cells. Shows how it was done, and the impact it had on different categories of overhead cost.
Swot Analysis of "Raychem Corp.: Interconnection Systems Division" written by Clayton M. Christensen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Raychem Interconnection facing as an external strategic factors. Some of the topics covered in Raychem Corp.: Interconnection Systems Division case study are - Strategic Management Strategies, Competitive strategy, Manufacturing, Time management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Raychem Corp.: Interconnection Systems Division casestudy better are - – increasing energy prices, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Raychem Corp.: Interconnection Systems Division
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Raychem Corp.: Interconnection Systems Division case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Raychem Interconnection, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Raychem Interconnection 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 Raychem Corp.: Interconnection Systems Division can be done for the following purposes –
1. Strategic planning using facts provided in Raychem Corp.: Interconnection Systems Division case study
2. Improving business portfolio management of Raychem Interconnection
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 Raychem Interconnection
Strengths Raychem Corp.: Interconnection Systems Division | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Raychem Interconnection in Raychem Corp.: Interconnection Systems Division Harvard Business Review case study are -
High switching costs
– The high switching costs that Raychem Interconnection 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
– Raychem Interconnection has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Raychem Interconnection 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
– Raychem Interconnection 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 Clayton M. Christensen 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.
High brand equity
– Raychem Interconnection has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Raychem Interconnection to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Raychem Interconnection
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Raychem Interconnection does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Technology & Operations industry
– Raychem Corp.: Interconnection Systems Division firm has clearly differentiated products in the market place. This has enabled Raychem Interconnection to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Raychem Interconnection to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Raychem Interconnection is one of the leading recruiters in the industry. Managers in the Raychem Corp.: Interconnection Systems Division are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Raychem Interconnection 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 Raychem Corp.: Interconnection Systems Division - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Raychem Interconnection 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.
Learning organization
- Raychem Interconnection 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 Raychem Interconnection is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Raychem Corp.: Interconnection Systems Division Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Raychem Interconnection is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Raychem Interconnection 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 Raychem Corp.: Interconnection Systems Division HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Raychem Corp.: Interconnection Systems Division | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Raychem Corp.: Interconnection Systems Division are -
High bargaining power of channel partners
– Because of the regulatory requirements, Clayton M. Christensen suggests that, Raychem Interconnection 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.
Capital Spending Reduction
– Even during the low interest decade, Raychem Interconnection 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Raychem Corp.: Interconnection Systems Division, it seems that the employees of Raychem Interconnection 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Raychem Corp.: Interconnection Systems Division, in the dynamic environment Raychem Interconnection has struggled to respond to the nimble upstart competition. Raychem Interconnection has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Raychem Interconnection is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Raychem Interconnection needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Raychem Interconnection to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Raychem Corp.: Interconnection Systems Division 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 Raychem Corp.: Interconnection Systems Division can leverage the sales team experience to cultivate customer relationships as Raychem Interconnection is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Raychem Interconnection 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. Raychem Interconnection 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Raychem Interconnection is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Raychem Corp.: Interconnection Systems Division can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Raychem Corp.: Interconnection Systems Division, 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 Raychem Corp.: Interconnection Systems Division HBR case study mentions - Raychem Interconnection takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Raychem Corp.: Interconnection Systems Division 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 Raychem Interconnection has relatively successful track record of launching new products.
Opportunities Raychem Corp.: Interconnection Systems Division | 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 Raychem Corp.: Interconnection Systems Division are -
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 Raychem Interconnection in the consumer business. Now Raychem Interconnection can target international markets with far fewer capital restrictions requirements than the existing system.
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 Raychem Interconnection 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.
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. Raychem Interconnection can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Raychem Interconnection to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Raychem Interconnection to hire the very best people irrespective of their geographical location.
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. Raychem Interconnection can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Raychem Interconnection 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 Raychem Corp.: Interconnection Systems Division - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Raychem Interconnection 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, Raychem Interconnection is facing challenges because of the dominance of functional experts in the organization. Raychem Corp.: Interconnection Systems Division 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Raychem Interconnection in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Raychem Interconnection has opened avenues for new revenue streams for the organization in the industry. This can help Raychem Interconnection to build a more holistic ecosystem as suggested in the Raychem Corp.: Interconnection Systems Division case study. Raychem Interconnection can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Raychem Interconnection to increase its market reach. Raychem Interconnection 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.
Loyalty marketing
– Raychem Interconnection 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Raychem Interconnection can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Raychem Interconnection can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Raychem Corp.: Interconnection Systems Division 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.
Threats Raychem Corp.: Interconnection Systems Division External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Raychem Corp.: Interconnection Systems Division are -
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. Raychem Interconnection needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
Regulatory challenges
– Raychem Interconnection 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 Raychem Interconnection 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Raychem Interconnection 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 Raychem Corp.: Interconnection Systems Division .
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 Raychem Interconnection in the Technology & Operations sector and impact the bottomline of the organization.
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. Raychem Interconnection 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Raychem Corp.: Interconnection Systems Division, Raychem Interconnection 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 .
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. Raychem Interconnection can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Raychem Interconnection can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Raychem Interconnection has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Raychem Interconnection 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.
Increasing wage structure of Raychem Interconnection
– 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 Raychem Interconnection.
Environmental challenges
– Raychem Interconnection 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. Raychem Interconnection can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Weighted SWOT Analysis of Raychem Corp.: Interconnection Systems Division 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 Raychem Corp.: Interconnection Systems Division 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 Raychem Corp.: Interconnection Systems Division 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 Raychem Corp.: Interconnection Systems Division 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 Raychem Corp.: Interconnection Systems Division 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 Raychem Interconnection needs to make to build a sustainable competitive advantage.