Da Jiang Innovations (DJI): The Rise of the Drones SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Da Jiang Innovations (DJI): The Rise of the Drones
Our case focuses on Da Jiang Innovations (DJI), the Shenzhen-based company that contributed significantly to the growing popularity of civilian drones not only in China, but also globally. It chronicles the genesis and development of the company and its recent efforts to address current challenges and anticipating future competition. DJI within a few years of producing its first drone, cornered more than 70% of the global civilian drone market and emerged as a "decacorn", which are "unicorns" that valued at least US$10 billion. However, with intensifying competition and rapid shifts in technology, DJI's leadership position could erode quickly. Additionally, as concerns about safety, privacy, and security continued to mount, what should DJI do? Our case offers students an opportunity to analyse the challenges and opportunities that confront a new market leader in an emerging industry, in the face of mounting competition and rapid technological shifts from 2017. It also showcases the rise of globally-minded Chinese firms, with DJI as an exemplar. These "born global" firms, also known as micro-multinationals, went global from the start and did not try to build a base in China's domestic markets as their first steps.
Swot Analysis of "Da Jiang Innovations (DJI): The Rise of the Drones" written by Wai Fong Boh, Wee Kiat Lim, Yi Zeng includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dji Drone facing as an external strategic factors. Some of the topics covered in Da Jiang Innovations (DJI): The Rise of the Drones case study are - Strategic Management Strategies, Innovation, IT, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Da Jiang Innovations (DJI): The Rise of the Drones casestudy better are - – supply chains are disrupted by pandemic , there is backlash against globalization, increasing commodity prices, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc
Introduction to SWOT Analysis of Da Jiang Innovations (DJI): The Rise of the Drones
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Da Jiang Innovations (DJI): The Rise of the Drones case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dji Drone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dji Drone 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 Da Jiang Innovations (DJI): The Rise of the Drones can be done for the following purposes –
1. Strategic planning using facts provided in Da Jiang Innovations (DJI): The Rise of the Drones case study
2. Improving business portfolio management of Dji Drone
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dji Drone
Strengths Da Jiang Innovations (DJI): The Rise of the Drones | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dji Drone in Da Jiang Innovations (DJI): The Rise of the Drones Harvard Business Review case study are -
High switching costs
– The high switching costs that Dji Drone 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.
Ability to recruit top talent
– Dji Drone is one of the leading recruiters in the industry. Managers in the Da Jiang Innovations (DJI): The Rise of the Drones are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– Da Jiang Innovations (DJI): The Rise of the Drones firm has clearly differentiated products in the market place. This has enabled Dji Drone to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Dji Drone to invest into research and development (R&D) and innovation.
Training and development
– Dji Drone has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Da Jiang Innovations (DJI): The Rise of the Drones 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.
Highly skilled collaborators
– Dji Drone 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 Da Jiang Innovations (DJI): The Rise of the Drones HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Dji Drone is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Dji Drone is one of the most innovative firm in sector. Manager in Da Jiang Innovations (DJI): The Rise of the Drones Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Dji Drone has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dji Drone to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Dji Drone in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Dji Drone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dji Drone 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.
Organizational Resilience of Dji Drone
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dji Drone does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Dji Drone in the sector have low bargaining power. Da Jiang Innovations (DJI): The Rise of the Drones has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dji Drone to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Da Jiang Innovations (DJI): The Rise of the Drones | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Da Jiang Innovations (DJI): The Rise of the Drones are -
No frontier risks strategy
– After analyzing the HBR case study Da Jiang Innovations (DJI): The Rise of the Drones, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Skills based hiring
– The stress on hiring functional specialists at Dji Drone 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.
Products dominated business model
– Even though Dji Drone 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 - Da Jiang Innovations (DJI): The Rise of the Drones should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Da Jiang Innovations (DJI): The Rise of the Drones, is just above the industry average. Dji Drone 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.
Capital Spending Reduction
– Even during the low interest decade, Dji Drone 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.
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 Dji Drone supply chain. Even after few cautionary changes mentioned in the HBR case study - Da Jiang Innovations (DJI): The Rise of the Drones, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dji Drone vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Dji Drone 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Da Jiang Innovations (DJI): The Rise of the Drones, it seems that the employees of Dji Drone 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, Wai Fong Boh, Wee Kiat Lim, Yi Zeng suggests that, Dji Drone 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.
Aligning sales with marketing
– It come across in the case study Da Jiang Innovations (DJI): The Rise of the Drones 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 Da Jiang Innovations (DJI): The Rise of the Drones can leverage the sales team experience to cultivate customer relationships as Dji Drone is planning to shift buying processes online.
Lack of clear differentiation of Dji Drone products
– To increase the profitability and margins on the products, Dji Drone needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Da Jiang Innovations (DJI): The Rise of the Drones | 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 Da Jiang Innovations (DJI): The Rise of the Drones are -
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. Dji Drone can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dji Drone can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Dji Drone in the consumer business. Now Dji Drone can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dji Drone is facing challenges because of the dominance of functional experts in the organization. Da Jiang Innovations (DJI): The Rise of the Drones 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.
Better consumer reach
– The expansion of the 5G network will help Dji Drone to increase its market reach. Dji Drone 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.
Leveraging digital technologies
– Dji Drone 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
– Dji Drone can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Building a culture of innovation
– managers at Dji Drone 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 Strategy & Execution segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dji Drone can use these opportunities to build new business models that can help the communities that Dji Drone operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Dji Drone can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Dji Drone 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dji Drone 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, Da Jiang Innovations (DJI): The Rise of the Drones, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dji Drone 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 Dji Drone to hire the very best people irrespective of their geographical location.
Threats Da Jiang Innovations (DJI): The Rise of the Drones External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Da Jiang Innovations (DJI): The Rise of the Drones are -
High dependence on third party suppliers
– Dji Drone 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.
Increasing wage structure of Dji Drone
– 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 Dji Drone.
Stagnating economy with rate increase
– Dji Drone can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Dji Drone has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Dji Drone needs to keep up with the evolution of technology in the Strategy & Execution 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dji Drone 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 Da Jiang Innovations (DJI): The Rise of the Drones .
Environmental challenges
– Dji Drone 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. Dji Drone can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Dji Drone is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Dji Drone can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Dji Drone.
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 Dji Drone business can come under increasing regulations regarding data privacy, data security, etc.
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.
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. Dji Drone 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 Dji Drone with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Da Jiang Innovations (DJI): The Rise of the Drones 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 Da Jiang Innovations (DJI): The Rise of the Drones 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 Da Jiang Innovations (DJI): The Rise of the Drones 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 Da Jiang Innovations (DJI): The Rise of the Drones 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 Da Jiang Innovations (DJI): The Rise of the Drones 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 Dji Drone needs to make to build a sustainable competitive advantage.