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 - – there is backlash against globalization, geopolitical disruptions, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing,
banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, 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 -
Cross disciplinary teams
– Horizontal connected teams at the Deimos Avila 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.
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.
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.
Strong track record of project management
– Deimos Avila 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
– Deimos Avila is one of the most innovative firm in sector. Manager in Deimos: Expanding to a New Market Using the Value Creation Wheel Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Deimos Avila 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 Deimos Avila is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Deimos: Expanding to a New Market Using the Value Creation Wheel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Innovation & Entrepreneurship field
– Deimos Avila 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 Deimos Avila in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Deimos Avila 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 Deimos: Expanding to a New Market Using the Value Creation Wheel HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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 -
Aligning sales with marketing
– It come across in the case study Deimos: Expanding to a New Market Using the Value Creation Wheel 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 Deimos: Expanding to a New Market Using the Value Creation Wheel can leverage the sales team experience to cultivate customer relationships as Deimos Avila is planning to shift buying processes online.
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 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 Deimos Avila supply chain. Even after few cautionary changes mentioned in the HBR case study - Deimos: Expanding to a New Market Using the Value Creation Wheel, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Deimos Avila vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Deimos Avila 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 - Deimos: Expanding to a New Market Using the Value Creation Wheel should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Vania Fonseca, Luis Filipe Lages, Phillip H. Kim suggests that, Deimos Avila 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.
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.
Low market penetration in new markets
– Outside its home market of Deimos Avila, firm in the HBR case study Deimos: Expanding to a New Market Using the Value Creation Wheel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Deimos: Expanding to a New Market Using the Value Creation Wheel, it seems that the employees of Deimos Avila 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Deimos: Expanding to a New Market Using the Value Creation Wheel, in the dynamic environment Deimos Avila has struggled to respond to the nimble upstart competition. Deimos Avila has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 -
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.
Developing new processes and practices
– Deimos Avila 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Deimos Avila can use these opportunities to build new business models that can help the communities that Deimos Avila operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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.
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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Deimos Avila is facing challenges because of the dominance of functional experts in the organization. Deimos: Expanding to a New Market Using the Value Creation Wheel 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
– 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.
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 -
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.
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.
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Deimos Avila with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Deimos: Expanding to a New Market Using the Value Creation Wheel, Deimos Avila 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 .
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.
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.
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.
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.
Consumer confidence and its impact on Deimos Avila 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.
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.