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 - – increasing household debt because of falling income levels, increasing commodity prices, there is backlash against globalization, wage bills are increasing, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China,
technology disruption, geopolitical disruptions, 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 -
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.
Analytics focus
– Dcxnet Daimlerchrysler 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 Arnd Klein, Helmut Krcmar 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.
Operational resilience
– The operational resilience strategy in the DCXNET: e-Transformation at DaimlerChrysler Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Dcxnet Daimlerchrysler is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Organizational Resilience of Dcxnet Daimlerchrysler
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dcxnet Daimlerchrysler does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
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.
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 -
Slow decision making process
– As mentioned earlier in the report, Dcxnet Daimlerchrysler 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. Dcxnet Daimlerchrysler 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, Dcxnet Daimlerchrysler 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.
Low market penetration in new markets
– Outside its home market of Dcxnet Daimlerchrysler, firm in the HBR case study DCXNET: e-Transformation at DaimlerChrysler needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study DCXNET: e-Transformation at DaimlerChrysler, 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.
Aligning sales with marketing
– It come across in the case study DCXNET: e-Transformation at DaimlerChrysler 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 DCXNET: e-Transformation at DaimlerChrysler can leverage the sales team experience to cultivate customer relationships as Dcxnet Daimlerchrysler is planning to shift buying processes online.
Products dominated business model
– Even though Dcxnet Daimlerchrysler has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - DCXNET: e-Transformation at DaimlerChrysler should strive to include more intangible value offerings along with its core products and services.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Dcxnet Daimlerchrysler supply chain. Even after few cautionary changes mentioned in the HBR case study - DCXNET: e-Transformation at DaimlerChrysler, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dcxnet Daimlerchrysler vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Dcxnet Daimlerchrysler needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
Skills based hiring
– The stress on hiring functional specialists at Dcxnet Daimlerchrysler has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 -
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.
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.
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.
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.
Buying journey improvements
– Dcxnet Daimlerchrysler can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DCXNET: e-Transformation at DaimlerChrysler 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
– 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dcxnet Daimlerchrysler 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.
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.
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. Dcxnet Daimlerchrysler can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Dcxnet Daimlerchrysler 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.
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.
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 -
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.
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 Dcxnet Daimlerchrysler business can come under increasing regulations regarding data privacy, data security, etc.
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. Dcxnet Daimlerchrysler needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dcxnet Daimlerchrysler 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 DCXNET: e-Transformation at DaimlerChrysler .
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.
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 Dcxnet Daimlerchrysler in the Technology & Operations sector and impact the bottomline of the organization.
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.
Stagnating economy with rate increase
– Dcxnet Daimlerchrysler 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.
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.