Deimos: Expanding to a New Market Using the Value Creation Wheel SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Deimos: Expanding to a New Market Using the Value Creation Wheel
Mr. Nuno Avila, General Director at Deimos Engenharia (Deimos), a private Portuguese Aerospace Engineering company and a key player in the European space sector, faced a crucial strategic decision. In the past, Deimos easily secured research grants from their funding sources to conduct path-breaking projects. However, these agencies now require applicants to specify market applications for their projects to qualify. This was an unknown concept for Deimos, a company steeped in cutting-edge scientific research. Avila's objective was to build a market-driven innovation culture-a difficult prospect in a company that prides itself on its technological advancements. Avila found himself faced with several options for how to proceed. With the annual board meeting scheduled in six months, he needs to make some decisions soon about what markets to pursue with the company's MyFARM software service. He is unsure about the Board's willingness to adopt a new strategy, so he invites the Value Creation Wheel team to address this challenge. With their help, Avila prepares a set of recommendations that if successful, will enable Deimos to transform itself from a science- focused company to an international player that makes the perfect bridge between technology and market needs in the space sector.
Authors :: Vania Fonseca, Luis Filipe Lages, Phillip H. Kim
Swot Analysis of "Deimos: Expanding to a New Market Using the Value Creation Wheel" written by Vania Fonseca, Luis Filipe Lages, Phillip H. Kim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Deimos Avila facing as an external strategic factors. Some of the topics covered in Deimos: Expanding to a New Market Using the Value Creation Wheel case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Marketing, Organizational culture and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Deimos: Expanding to a New Market Using the Value Creation Wheel casestudy better are - – increasing government debt because of Covid-19 spendings, wage bills are increasing, there is backlash against globalization, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
digital marketing is dominated by two big players Facebook and Google, increasing energy prices, etc
Introduction to SWOT Analysis of Deimos: Expanding to a New Market Using the Value Creation Wheel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Deimos: Expanding to a New Market Using the Value Creation Wheel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Deimos Avila, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Deimos Avila 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 Deimos: Expanding to a New Market Using the Value Creation Wheel can be done for the following purposes –
1. Strategic planning using facts provided in Deimos: Expanding to a New Market Using the Value Creation Wheel case study
2. Improving business portfolio management of Deimos Avila
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 Deimos Avila
Strengths Deimos: Expanding to a New Market Using the Value Creation Wheel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Deimos Avila in Deimos: Expanding to a New Market Using the Value Creation Wheel Harvard Business Review case study are -
Ability to recruit top talent
– Deimos Avila is one of the leading recruiters in the industry. Managers in the Deimos: Expanding to a New Market Using the Value Creation Wheel 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 Innovation & Entrepreneurship industry
– Deimos: Expanding to a New Market Using the Value Creation Wheel firm has clearly differentiated products in the market place. This has enabled Deimos Avila to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Deimos Avila to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Deimos: Expanding to a New Market Using the Value Creation Wheel 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.
Organizational Resilience of Deimos Avila
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Deimos Avila does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Deimos Avila in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Deimos Avila in the sector have low bargaining power. Deimos: Expanding to a New Market Using the Value Creation Wheel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Deimos Avila to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Deimos Avila has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Deimos Avila to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Deimos Avila has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Deimos: Expanding to a New Market Using the Value Creation Wheel 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Deimos Avila digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Deimos Avila 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.
High switching costs
– The high switching costs that Deimos Avila 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.
Successful track record of launching new products
– Deimos Avila has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Deimos Avila 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.
Diverse revenue streams
– Deimos Avila is present in almost all the verticals within the industry. This has provided firm in Deimos: Expanding to a New Market Using the Value Creation Wheel 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.
Weaknesses Deimos: Expanding to a New Market Using the Value Creation Wheel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Deimos: Expanding to a New Market Using the Value Creation Wheel are -
Lack of clear differentiation of Deimos Avila products
– To increase the profitability and margins on the products, Deimos Avila needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Deimos Avila 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Deimos: Expanding to a New Market Using the Value Creation Wheel 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 Deimos Avila 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Deimos Avila is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Deimos: Expanding to a New Market Using the Value Creation Wheel 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 Deimos: Expanding to a New Market Using the Value Creation Wheel HBR case study mentions - Deimos Avila 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 Deimos Avila is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Deimos Avila needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Deimos Avila to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Deimos Avila 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.
Capital Spending Reduction
– Even during the low interest decade, Deimos Avila 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.
Interest costs
– Compare to the competition, Deimos Avila has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Workers concerns about automation
– As automation is fast increasing in the segment, Deimos Avila 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 cash cycle compare to competitors
Deimos Avila 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.
Opportunities Deimos: Expanding to a New Market Using the Value Creation Wheel | 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 Deimos: Expanding to a New Market Using the Value Creation Wheel are -
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 Deimos Avila in the consumer business. Now Deimos Avila can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Deimos Avila 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, Deimos: Expanding to a New Market Using the Value Creation Wheel, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Deimos Avila can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Deimos Avila can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Deimos Avila can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Deimos: Expanding to a New Market Using the Value Creation Wheel 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Deimos Avila 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.
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 Deimos Avila 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.
Loyalty marketing
– Deimos Avila 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.
Building a culture of innovation
– managers at Deimos Avila 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 Innovation & Entrepreneurship segment.
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. Deimos Avila can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Deimos Avila 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 Deimos: Expanding to a New Market Using the Value Creation Wheel - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Deimos Avila to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Deimos Avila has opened avenues for new revenue streams for the organization in the industry. This can help Deimos Avila to build a more holistic ecosystem as suggested in the Deimos: Expanding to a New Market Using the Value Creation Wheel case study. Deimos Avila can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Deimos Avila 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.
Threats Deimos: Expanding to a New Market Using the Value Creation Wheel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Deimos: Expanding to a New Market Using the Value Creation Wheel are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Deimos Avila 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 Deimos: Expanding to a New Market Using the Value Creation Wheel .
Environmental challenges
– Deimos Avila 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. Deimos Avila can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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. Deimos Avila can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Deimos Avila needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing wage structure of Deimos Avila
– 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 Deimos Avila.
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 Deimos Avila.
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 Deimos Avila in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Deimos Avila is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Deimos Avila has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Deimos Avila 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.
Stagnating economy with rate increase
– Deimos Avila 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.
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 Deimos Avila business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Deimos Avila 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.
High dependence on third party suppliers
– Deimos Avila 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.
Weighted SWOT Analysis of Deimos: Expanding to a New Market Using the Value Creation Wheel 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 Deimos: Expanding to a New Market Using the Value Creation Wheel 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 Deimos: Expanding to a New Market Using the Value Creation Wheel 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 Deimos: Expanding to a New Market Using the Value Creation Wheel 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 Deimos: Expanding to a New Market Using the Value Creation Wheel 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 Deimos Avila needs to make to build a sustainable competitive advantage.
