Case Study Description of DCXNET: e-Transformation at DaimlerChrysler
In 1999, the automotive industry was in a difficult situation: overcapacity and customer demand for faster delivery and better service drove executives to explore the potential business value of the internet. The authors provide a teaching case, which is based on an analysis of the DCXNET initiative which bundled all e-business actions taken by DaimlerChrysler to exploit the opportunities of this then new technology. The teaching case describes the strategic planning process for e-business at DaimlerChrysler, resulting organizational structures and an outline of the components of DCXNET. Furthermore, the authors provide results of the initiative, success factors and lessons learned.
Swot Analysis of "DCXNET: e-Transformation at DaimlerChrysler" written by Arnd Klein, Helmut Krcmar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dcxnet Daimlerchrysler facing as an external strategic factors. Some of the topics covered in DCXNET: e-Transformation at DaimlerChrysler case study are - Strategic Management Strategies, Innovation and Technology & Operations.
Some of the macro environment factors that can be used to understand the DCXNET: e-Transformation at DaimlerChrysler casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, technology disruption, increasing household debt because of falling income levels, increasing energy prices, central banks are concerned over increasing inflation,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of DCXNET: e-Transformation at DaimlerChrysler
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DCXNET: e-Transformation at DaimlerChrysler case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dcxnet Daimlerchrysler, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dcxnet Daimlerchrysler 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 DCXNET: e-Transformation at DaimlerChrysler can be done for the following purposes –
1. Strategic planning using facts provided in DCXNET: e-Transformation at DaimlerChrysler case study
2. Improving business portfolio management of Dcxnet Daimlerchrysler
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 Dcxnet Daimlerchrysler
Strengths DCXNET: e-Transformation at DaimlerChrysler | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dcxnet Daimlerchrysler in DCXNET: e-Transformation at DaimlerChrysler Harvard Business Review case study are -
High switching costs
– The high switching costs that Dcxnet Daimlerchrysler 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.
Cross disciplinary teams
– Horizontal connected teams at the Dcxnet Daimlerchrysler 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.
Successful track record of launching new products
– Dcxnet Daimlerchrysler has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dcxnet Daimlerchrysler 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.
Highly skilled collaborators
– Dcxnet Daimlerchrysler 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 DCXNET: e-Transformation at DaimlerChrysler HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Dcxnet Daimlerchrysler is one of the most innovative firm in sector. Manager in DCXNET: e-Transformation at DaimlerChrysler 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 Dcxnet Daimlerchrysler in the sector have low bargaining power. DCXNET: e-Transformation at DaimlerChrysler has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dcxnet Daimlerchrysler to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Dcxnet Daimlerchrysler 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 DCXNET: e-Transformation at DaimlerChrysler - 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
– Dcxnet Daimlerchrysler has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in DCXNET: e-Transformation at DaimlerChrysler 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.
High brand equity
– Dcxnet Daimlerchrysler has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dcxnet Daimlerchrysler to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Technology & Operations industry
– DCXNET: e-Transformation at DaimlerChrysler firm has clearly differentiated products in the market place. This has enabled Dcxnet Daimlerchrysler to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Dcxnet Daimlerchrysler to invest into research and development (R&D) and innovation.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Dcxnet Daimlerchrysler digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dcxnet Daimlerchrysler 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.
Ability to lead change in Technology & Operations field
– Dcxnet Daimlerchrysler is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Dcxnet Daimlerchrysler in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses DCXNET: e-Transformation at DaimlerChrysler | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DCXNET: e-Transformation at DaimlerChrysler are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study DCXNET: e-Transformation at DaimlerChrysler, in the dynamic environment Dcxnet Daimlerchrysler has struggled to respond to the nimble upstart competition. Dcxnet Daimlerchrysler 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 Dcxnet Daimlerchrysler is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Dcxnet Daimlerchrysler needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dcxnet Daimlerchrysler to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As DCXNET: e-Transformation at DaimlerChrysler HBR case study mentions - Dcxnet Daimlerchrysler 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study DCXNET: e-Transformation at DaimlerChrysler, it seems that the employees of Dcxnet Daimlerchrysler 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.
Need for greater diversity
– Dcxnet Daimlerchrysler 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.
Lack of clear differentiation of Dcxnet Daimlerchrysler products
– To increase the profitability and margins on the products, Dcxnet Daimlerchrysler needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Dcxnet Daimlerchrysler 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study DCXNET: e-Transformation at DaimlerChrysler, is just above the industry average. Dcxnet Daimlerchrysler 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Arnd Klein, Helmut Krcmar suggests that, Dcxnet Daimlerchrysler 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.
Interest costs
– Compare to the competition, Dcxnet Daimlerchrysler 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dcxnet Daimlerchrysler is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study DCXNET: e-Transformation at DaimlerChrysler can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities DCXNET: e-Transformation at DaimlerChrysler | 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 DCXNET: e-Transformation at DaimlerChrysler are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dcxnet Daimlerchrysler 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, DCXNET: e-Transformation at DaimlerChrysler, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Dcxnet Daimlerchrysler has opened avenues for new revenue streams for the organization in the industry. This can help Dcxnet Daimlerchrysler to build a more holistic ecosystem as suggested in the DCXNET: e-Transformation at DaimlerChrysler case study. Dcxnet Daimlerchrysler 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 Dcxnet Daimlerchrysler to increase its market reach. Dcxnet Daimlerchrysler 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.
Developing new processes and practices
– Dcxnet Daimlerchrysler 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dcxnet Daimlerchrysler 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.
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. Dcxnet Daimlerchrysler 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. Dcxnet Daimlerchrysler 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dcxnet Daimlerchrysler is facing challenges because of the dominance of functional experts in the organization. DCXNET: e-Transformation at DaimlerChrysler 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.
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 Dcxnet Daimlerchrysler in the consumer business. Now Dcxnet Daimlerchrysler can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Dcxnet Daimlerchrysler 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.
Manufacturing automation
– Dcxnet Daimlerchrysler 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dcxnet Daimlerchrysler can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Dcxnet Daimlerchrysler 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 DCXNET: e-Transformation at DaimlerChrysler - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dcxnet Daimlerchrysler to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Dcxnet Daimlerchrysler 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.
Threats DCXNET: e-Transformation at DaimlerChrysler External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DCXNET: e-Transformation at DaimlerChrysler are -
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 Dcxnet Daimlerchrysler.
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. Dcxnet Daimlerchrysler can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Dcxnet Daimlerchrysler 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dcxnet Daimlerchrysler with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Shortening product life cycle
– it is one of the major threat that Dcxnet Daimlerchrysler is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Dcxnet Daimlerchrysler has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Dcxnet Daimlerchrysler 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 Dcxnet Daimlerchrysler
– 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 Dcxnet Daimlerchrysler.
Consumer confidence and its impact on Dcxnet Daimlerchrysler 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
– Dcxnet Daimlerchrysler 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. Dcxnet Daimlerchrysler can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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
– Dcxnet Daimlerchrysler 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
– Dcxnet Daimlerchrysler 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.
Weighted SWOT Analysis of DCXNET: e-Transformation at DaimlerChrysler 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 DCXNET: e-Transformation at DaimlerChrysler 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 DCXNET: e-Transformation at DaimlerChrysler 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 DCXNET: e-Transformation at DaimlerChrysler 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 DCXNET: e-Transformation at DaimlerChrysler 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 Dcxnet Daimlerchrysler needs to make to build a sustainable competitive advantage.