Case Study Description of Testin: Partnering with Multinational Corporations
By 2017, Beijing Testin Information Technology Co., Ltd. (Testin), had forged partnerships with multiple large multinational companies (e.g., Microsoft, IBM, ARM, Intel). Since it was founded in 2011, Testin had served over 800,000 application developers by conducting more than 150 million quality and security tests on over 2.5 million mobile applications. It had received several rounds of financing totaling over $80 million. Many Chinese Internet companies had tried to acquire Testin, and a well-known MNC asked Testin to sign an exclusive service contract. Wang and his partners resisted such offers and were determined that Testin should maintain its neutrality. But as a five-year old enterprise, Testin's big concern was how it could "stay hungry and stay foolish." The authors Shameen Prashantham and Liman Zhao are affiliated with China Europe International Business School.
Swot Analysis of "Testin: Partnering with Multinational Corporations" written by Shameen Prashantham, Liman Zhao includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Testin Prashantham facing as an external strategic factors. Some of the topics covered in Testin: Partnering with Multinational Corporations case study are - Strategic Management Strategies, Joint ventures and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Testin: Partnering with Multinational Corporations casestudy better are - – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, challanges to central banks by blockchain based private currencies, there is backlash against globalization, wage bills are increasing, increasing government debt because of Covid-19 spendings,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Testin: Partnering with Multinational Corporations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Testin: Partnering with Multinational Corporations case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Testin Prashantham, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Testin Prashantham 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 Testin: Partnering with Multinational Corporations can be done for the following purposes –
1. Strategic planning using facts provided in Testin: Partnering with Multinational Corporations case study
2. Improving business portfolio management of Testin Prashantham
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Testin Prashantham
Strengths Testin: Partnering with Multinational Corporations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Testin Prashantham in Testin: Partnering with Multinational Corporations Harvard Business Review case study are -
Successful track record of launching new products
– Testin Prashantham has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Testin Prashantham 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.
Strong track record of project management
– Testin Prashantham is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Testin Prashantham is present in almost all the verticals within the industry. This has provided firm in Testin: Partnering with Multinational Corporations 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.
Training and development
– Testin Prashantham has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Testin: Partnering with Multinational Corporations 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.
Low bargaining power of suppliers
– Suppliers of Testin Prashantham in the sector have low bargaining power. Testin: Partnering with Multinational Corporations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Testin Prashantham to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Testin Prashantham is one of the most innovative firm in sector. Manager in Testin: Partnering with Multinational Corporations 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 Testin Prashantham 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 lead change in Innovation & Entrepreneurship field
– Testin Prashantham 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 Testin Prashantham in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Testin Prashantham are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Testin: Partnering with Multinational Corporations firm has clearly differentiated products in the market place. This has enabled Testin Prashantham to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Testin Prashantham to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Testin Prashantham is one of the leading recruiters in the industry. Managers in the Testin: Partnering with Multinational Corporations are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Testin Prashantham digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Testin Prashantham 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.
Weaknesses Testin: Partnering with Multinational Corporations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Testin: Partnering with Multinational Corporations are -
Products dominated business model
– Even though Testin Prashantham 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 - Testin: Partnering with Multinational Corporations should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Testin Prashantham 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 Testin Prashantham supply chain. Even after few cautionary changes mentioned in the HBR case study - Testin: Partnering with Multinational Corporations, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Testin Prashantham vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Testin: Partnering with Multinational Corporations, in the dynamic environment Testin Prashantham has struggled to respond to the nimble upstart competition. Testin Prashantham has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Shameen Prashantham, Liman Zhao suggests that, Testin Prashantham 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.
Capital Spending Reduction
– Even during the low interest decade, Testin Prashantham 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.
Slow decision making process
– As mentioned earlier in the report, Testin Prashantham 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. Testin Prashantham 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.
Increasing silos among functional specialists
– The organizational structure of Testin Prashantham is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Testin Prashantham needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Testin Prashantham to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Testin: Partnering with Multinational Corporations HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Testin Prashantham has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Testin: Partnering with Multinational Corporations, it seems that the employees of Testin Prashantham 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.
Skills based hiring
– The stress on hiring functional specialists at Testin Prashantham 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 Testin: Partnering with Multinational Corporations | 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 Testin: Partnering with Multinational Corporations are -
Creating value in data economy
– The success of analytics program of Testin Prashantham has opened avenues for new revenue streams for the organization in the industry. This can help Testin Prashantham to build a more holistic ecosystem as suggested in the Testin: Partnering with Multinational Corporations case study. Testin Prashantham can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Testin Prashantham 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Testin Prashantham in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Testin Prashantham 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. Testin Prashantham 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.
Leveraging digital technologies
– Testin Prashantham 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.
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 Testin Prashantham in the consumer business. Now Testin Prashantham 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, Testin Prashantham is facing challenges because of the dominance of functional experts in the organization. Testin: Partnering with Multinational Corporations 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.
Using analytics as competitive advantage
– Testin Prashantham 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 Testin: Partnering with Multinational Corporations - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Testin Prashantham 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. Testin Prashantham can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Testin Prashantham to increase its market reach. Testin Prashantham 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.
Learning at scale
– Online learning technologies has now opened space for Testin Prashantham 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.
Developing new processes and practices
– Testin Prashantham can develop new processes and procedures in Innovation & Entrepreneurship 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Testin Prashantham can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Testin: Partnering with Multinational Corporations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Testin: Partnering with Multinational Corporations are -
High dependence on third party suppliers
– Testin Prashantham 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.
Consumer confidence and its impact on Testin Prashantham 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Testin: Partnering with Multinational Corporations, Testin Prashantham may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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 Testin Prashantham.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Testin Prashantham can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Testin Prashantham with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Testin Prashantham 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.
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 Testin Prashantham in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Testin Prashantham in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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. Testin Prashantham 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 wage structure of Testin Prashantham
– 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 Testin Prashantham.
Technology acceleration in Forth Industrial Revolution
– Testin Prashantham has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Testin Prashantham needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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.
Weighted SWOT Analysis of Testin: Partnering with Multinational Corporations 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 Testin: Partnering with Multinational Corporations 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 Testin: Partnering with Multinational Corporations 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 Testin: Partnering with Multinational Corporations 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 Testin: Partnering with Multinational Corporations 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 Testin Prashantham needs to make to build a sustainable competitive advantage.