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 - – increasing government debt because of Covid-19 spendings, increasing energy prices, increasing household debt because of falling income levels, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices,
cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, 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 -
Learning organization
- Dji Drone is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Dji Drone is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Da Jiang Innovations (DJI): The Rise of the Drones Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Dji Drone 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 Da Jiang Innovations (DJI): The Rise of the Drones - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Dji Drone digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dji Drone 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.
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.
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.
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.
Diverse revenue streams
– Dji Drone is present in almost all the verticals within the industry. This has provided firm in Da Jiang Innovations (DJI): The Rise of the Drones case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
Operational resilience
– The operational resilience strategy in the Da Jiang Innovations (DJI): The Rise of the Drones 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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Dji Drone 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. Dji Drone 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.
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 cash cycle compare to competitors
Dji Drone 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.
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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dji Drone is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Da Jiang Innovations (DJI): The Rise of the Drones can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Da Jiang Innovations (DJI): The Rise of the Drones HBR case study mentions - Dji Drone 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.
Increasing silos among functional specialists
– The organizational structure of Dji Drone is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Dji Drone needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dji Drone to focus more on services rather than just following the product oriented approach.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dji Drone in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Loyalty marketing
– Dji Drone 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.
Developing new processes and practices
– Dji Drone can develop new processes and procedures in Strategy & Execution 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.
Using analytics as competitive advantage
– Dji Drone 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 Da Jiang Innovations (DJI): The Rise of the Drones - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dji Drone to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Dji Drone can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Da Jiang Innovations (DJI): The Rise of the Drones 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.
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.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Dji Drone to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dji Drone 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. Dji Drone 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, 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.
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 -
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 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.
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 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 .
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.
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.
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.
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. Dji Drone needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
Regulatory challenges
– Dji Drone 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 Strategy & Execution industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dji Drone in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Dji Drone in the Strategy & Execution sector and impact the bottomline of the organization.
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.