Is Your Business Ready for a Digital Future? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Is Your Business Ready for a Digital Future?
This is an MIT Sloan Management Review article. Successfully incorporating today's digital technologies requires companies to work in new ways. To explore how digital technologies are changing the way companies do business, MIT Sloan Management Review and Deloitte surveyed more than 4,800 respondents and interviewed 19 business and thought leaders. The central question the authors asked: How are companies using digital technologies -such as social media, data and analytics, mobile devices and cloud computing -to compete and operate differently? Using results from these quantitative and qualitative data, the authors provide insights on the state of digital business and what managers need to know and do to navigate and benefit from these trends. A key concept behind this research is digital business maturity. The authors asked survey respondents to "imagine an ideal organization transformed by digital technologies and capabilities that improve processes, engage talent across the organization, and drive new and value-generating business models"and then to rate their company against that ideal on a scale of 1-10 (with 10 being the closest to the ideal). Forty-five percent of respondents placed their companies in the middle or "developing"group (ratings 4-6), while 29% put their companies in the higher "maturing"category (ratings 7-10). The remaining 26% placed their companies in the lower "early"group (ratings 1-3). Perhaps the main insight is that the key drivers of digital transformation are not the digital technologies themselves but business factors -in particular, strategy, culture and talent development. Effective digital strategies are less about acquiring and implementing the right technology than about reconfiguring the business to take advantage of the information these technologies enable. The authors found that the objectives of a company's digital strategy also differ depending on digital maturity. The vast majority of companies surveyed want to use digital technologies to improve customer interactions. What differentiates the most mature companies, however, is a willingness to use digital to transform their business more broadly. Respondents expressed a strong preference for working for a digitally mature company. However, a surprisingly high number of employees were dissatisfied with how their companies were reacting to digital trends overall.
Authors :: Gerald C. Kane, Doug Palmer, Anh Nguyen Phillips, David Kiron
Swot Analysis of "Is Your Business Ready for a Digital Future?" written by Gerald C. Kane, Doug Palmer, Anh Nguyen Phillips, David Kiron includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Digital Respondents facing as an external strategic factors. Some of the topics covered in Is Your Business Ready for a Digital Future? case study are - Strategic Management Strategies, Talent management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Is Your Business Ready for a Digital Future? casestudy better are - – central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, there is backlash against globalization, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Is Your Business Ready for a Digital Future?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Is Your Business Ready for a Digital Future? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Digital Respondents, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Digital Respondents 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 Is Your Business Ready for a Digital Future? can be done for the following purposes –
1. Strategic planning using facts provided in Is Your Business Ready for a Digital Future? case study
2. Improving business portfolio management of Digital Respondents
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 Digital Respondents
Strengths Is Your Business Ready for a Digital Future? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Digital Respondents in Is Your Business Ready for a Digital Future? Harvard Business Review case study are -
High brand equity
– Digital Respondents has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Digital Respondents to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Digital Respondents 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 Is Your Business Ready for a Digital Future? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– Is Your Business Ready for a Digital Future? firm has clearly differentiated products in the market place. This has enabled Digital Respondents to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Digital Respondents to invest into research and development (R&D) and innovation.
Innovation driven organization
– Digital Respondents is one of the most innovative firm in sector. Manager in Is Your Business Ready for a Digital Future? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Digital Respondents has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Is Your Business Ready for a Digital Future? 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.
Superior customer experience
– The customer experience strategy of Digital Respondents in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Digital Respondents 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 Digital Respondents is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Is Your Business Ready for a Digital Future? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Digital Respondents 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 Is Your Business Ready for a Digital Future? - 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 Digital Respondents 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.
Low bargaining power of suppliers
– Suppliers of Digital Respondents in the sector have low bargaining power. Is Your Business Ready for a Digital Future? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Digital Respondents to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Digital Respondents 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
– Digital Respondents is present in almost all the verticals within the industry. This has provided firm in Is Your Business Ready for a Digital Future? 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.
Weaknesses Is Your Business Ready for a Digital Future? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Is Your Business Ready for a Digital Future? are -
High bargaining power of channel partners
– Because of the regulatory requirements, Gerald C. Kane, Doug Palmer, Anh Nguyen Phillips, David Kiron suggests that, Digital Respondents 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 cash cycle compare to competitors
Digital Respondents 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, Digital Respondents 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. Digital Respondents 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.
Capital Spending Reduction
– Even during the low interest decade, Digital Respondents 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
– Digital Respondents 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 strategic competitive environment developments
– As Is Your Business Ready for a Digital Future? HBR case study mentions - Digital Respondents 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 operating costs
– Compare to the competitors, firm in the HBR case study Is Your Business Ready for a Digital Future? 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 Digital Respondents 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Is Your Business Ready for a Digital Future?, is just above the industry average. Digital Respondents 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.
Increasing silos among functional specialists
– The organizational structure of Digital Respondents is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Digital Respondents needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Digital Respondents to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Digital Respondents, firm in the HBR case study Is Your Business Ready for a Digital Future? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Digital Respondents 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.
Opportunities Is Your Business Ready for a Digital Future? | 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 Is Your Business Ready for a Digital Future? are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Digital Respondents 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, Is Your Business Ready for a Digital Future?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Digital Respondents to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Digital Respondents in the consumer business. Now Digital Respondents can target international markets with far fewer capital restrictions requirements than the existing system.
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. Digital Respondents can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Digital Respondents 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 Digital Respondents to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Digital Respondents is facing challenges because of the dominance of functional experts in the organization. Is Your Business Ready for a Digital Future? 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Digital Respondents 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.
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. Digital Respondents can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Digital Respondents 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.
Developing new processes and practices
– Digital Respondents 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.
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. Digital Respondents 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. Digital Respondents 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.
Buying journey improvements
– Digital Respondents can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Is Your Business Ready for a Digital Future? 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.
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 Digital Respondents 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.
Threats Is Your Business Ready for a Digital Future? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Is Your Business Ready for a Digital Future? are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Digital Respondents 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 Is Your Business Ready for a Digital Future? .
Increasing wage structure of Digital Respondents
– 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 Digital Respondents.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Digital Respondents 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.
Regulatory challenges
– Digital Respondents 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.
High dependence on third party suppliers
– Digital Respondents 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.
Stagnating economy with rate increase
– Digital Respondents 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Is Your Business Ready for a Digital Future?, Digital Respondents 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 .
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.
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. Digital Respondents needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Digital Respondents business can come under increasing regulations regarding data privacy, data security, etc.
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. Digital Respondents 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.
Consumer confidence and its impact on Digital Respondents 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.
Environmental challenges
– Digital Respondents 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. Digital Respondents can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Weighted SWOT Analysis of Is Your Business Ready for a Digital Future? 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 Is Your Business Ready for a Digital Future? 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 Is Your Business Ready for a Digital Future? 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 Is Your Business Ready for a Digital Future? 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 Is Your Business Ready for a Digital Future? 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 Digital Respondents needs to make to build a sustainable competitive advantage.