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 commodity prices, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, talent flight as more people leaving formal jobs, wage bills are increasing, increasing household debt because of falling income levels,
digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, 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 -
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.
Ability to recruit top talent
– Dcxnet Daimlerchrysler is one of the leading recruiters in the industry. Managers in the DCXNET: e-Transformation at DaimlerChrysler are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study DCXNET: e-Transformation at DaimlerChrysler 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 Dcxnet Daimlerchrysler 's lucrative customers.
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.
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.
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 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.
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.
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.
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.
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.
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 -
Loyalty marketing
– Dcxnet Daimlerchrysler 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.
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.
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.
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. Dcxnet Daimlerchrysler can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of 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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dcxnet Daimlerchrysler 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 Dcxnet Daimlerchrysler to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dcxnet Daimlerchrysler can use these opportunities to build new business models that can help the communities that Dcxnet Daimlerchrysler operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study DCXNET: e-Transformation at DaimlerChrysler, Dcxnet Daimlerchrysler 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. 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.
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 .
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.
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.
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.
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.