Case Study Description of Lumo Bodytech: A Bumpy Journey
Monisha Perkash cofounded Lumo Bodytech during an incubation program organized by Innovation Endeavors - the venture capital firm started by Eric Schmidt - in 2011. At the time, she had barely met her cofounders and the team was expected to launch a business after six months of design thinking and prototyping efforts. The result was a start-up focused on improving posture and helping solve the common problem of back pain. As of 2018, Lumo Bodytech was still alive and thriving, but the journey had not been free of obstacles and difficult decisions for the CEO. Even before the conclusion of the incubation phase, one of the cofounders had expressed his dissatisfaction with the direction of the ideation process and threatened to quit if nothing changed. He was an accomplished software engineer who had become a friend in just a few months of work. Additionally, the equity for the new business had already been split among the four cofounders, which could further complicate any exit negotiations. Around a year later, Lumo Bodytech had successfully launched but the wearables fever was dying down and the financial needs of the young start-up became more pressing by the day. That was when Perkash was approached by a large Asian manufacturer who would be willing to invest if the company implemented a significant change in its strategy, from focusing on a single product to adopting a platform approach to its product line. It was a hard decision to face so early in their trajectory, but Perkash knew she had to make a choice. The challenges related to financing the company would knock on Perkash's door once again in mid-2014, when the company had to decide between raising venture debt or settling for a smaller round of equity financing. To make matters worse, there seemed to be a central misalignment between the cofounders and one of the board members about how to approach the issue. Finally, Perkash had also experienced a fair amount of human resources problems over the years. Some of those were a superstar engineer who had a huge ego, a former classmate who wanted new responsibilities but was underperforming and a new hire who had come from a much larger company and was not prepared for the challenges of a startup environment. Perkash saw it all.
Swot Analysis of "Lumo Bodytech: A Bumpy Journey" written by George Foster, Amadeus Orleans includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Perkash Bodytech facing as an external strategic factors. Some of the topics covered in Lumo Bodytech: A Bumpy Journey case study are - Strategic Management Strategies, Firing, Hiring, Innovation, Leading teams and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Lumo Bodytech: A Bumpy Journey casestudy better are - – cloud computing is disrupting traditional business models, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
increasing transportation and logistics costs, geopolitical disruptions, etc
Introduction to SWOT Analysis of Lumo Bodytech: A Bumpy Journey
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lumo Bodytech: A Bumpy Journey case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Perkash Bodytech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Perkash Bodytech 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 Lumo Bodytech: A Bumpy Journey can be done for the following purposes –
1. Strategic planning using facts provided in Lumo Bodytech: A Bumpy Journey case study
2. Improving business portfolio management of Perkash Bodytech
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 Perkash Bodytech
Strengths Lumo Bodytech: A Bumpy Journey | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Perkash Bodytech in Lumo Bodytech: A Bumpy Journey Harvard Business Review case study are -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Perkash Bodytech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Perkash Bodytech 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 Perkash Bodytech 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.
Low bargaining power of suppliers
– Suppliers of Perkash Bodytech in the sector have low bargaining power. Lumo Bodytech: A Bumpy Journey has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Perkash Bodytech to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Perkash Bodytech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Perkash Bodytech to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Perkash Bodytech in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Perkash Bodytech 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 Perkash Bodytech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Lumo Bodytech: A Bumpy Journey Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Perkash Bodytech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Perkash Bodytech 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
– Perkash Bodytech is present in almost all the verticals within the industry. This has provided firm in Lumo Bodytech: A Bumpy Journey 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.
Operational resilience
– The operational resilience strategy in the Lumo Bodytech: A Bumpy Journey 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.
Ability to lead change in Innovation & Entrepreneurship field
– Perkash Bodytech 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 Perkash Bodytech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Perkash Bodytech is one of the most innovative firm in sector. Manager in Lumo Bodytech: A Bumpy Journey Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Perkash Bodytech
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Perkash Bodytech does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Lumo Bodytech: A Bumpy Journey | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lumo Bodytech: A Bumpy Journey are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Lumo Bodytech: A Bumpy Journey, is just above the industry average. Perkash Bodytech 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.
Low market penetration in new markets
– Outside its home market of Perkash Bodytech, firm in the HBR case study Lumo Bodytech: A Bumpy Journey needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Perkash Bodytech 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. Perkash Bodytech 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.
Capital Spending Reduction
– Even during the low interest decade, Perkash Bodytech 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.
Products dominated business model
– Even though Perkash Bodytech 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 - Lumo Bodytech: A Bumpy Journey should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Lumo Bodytech: A Bumpy Journey 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 Perkash Bodytech has relatively successful track record of launching new products.
Lack of clear differentiation of Perkash Bodytech products
– To increase the profitability and margins on the products, Perkash Bodytech needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Lumo Bodytech: A Bumpy Journey, in the dynamic environment Perkash Bodytech has struggled to respond to the nimble upstart competition. Perkash Bodytech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Lumo Bodytech: A Bumpy Journey HBR case study mentions - Perkash Bodytech 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.
Interest costs
– Compare to the competition, Perkash Bodytech 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Perkash Bodytech is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Lumo Bodytech: A Bumpy Journey can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Lumo Bodytech: A Bumpy Journey | 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 Lumo Bodytech: A Bumpy Journey are -
Buying journey improvements
– Perkash Bodytech can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lumo Bodytech: A Bumpy Journey 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.
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. Perkash Bodytech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Perkash Bodytech 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 Perkash Bodytech to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Perkash Bodytech can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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. Perkash Bodytech can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Perkash Bodytech 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, Lumo Bodytech: A Bumpy Journey, 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, Perkash Bodytech 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Perkash Bodytech can use these opportunities to build new business models that can help the communities that Perkash Bodytech operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 Perkash Bodytech in the consumer business. Now Perkash Bodytech can target international markets with far fewer capital restrictions requirements than the existing system.
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. Perkash Bodytech 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. Perkash Bodytech 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.
Better consumer reach
– The expansion of the 5G network will help Perkash Bodytech to increase its market reach. Perkash Bodytech 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.
Creating value in data economy
– The success of analytics program of Perkash Bodytech has opened avenues for new revenue streams for the organization in the industry. This can help Perkash Bodytech to build a more holistic ecosystem as suggested in the Lumo Bodytech: A Bumpy Journey case study. Perkash Bodytech can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Perkash Bodytech 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.
Threats Lumo Bodytech: A Bumpy Journey External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lumo Bodytech: A Bumpy Journey 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.
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 Perkash Bodytech business can come under increasing regulations regarding data privacy, data security, etc.
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. Perkash Bodytech 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Lumo Bodytech: A Bumpy Journey, Perkash Bodytech 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 .
Environmental challenges
– Perkash Bodytech 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. Perkash Bodytech 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. Perkash Bodytech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Perkash Bodytech 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.
Technology acceleration in Forth Industrial Revolution
– Perkash Bodytech has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Perkash Bodytech 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.
Increasing wage structure of Perkash Bodytech
– 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 Perkash Bodytech.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Perkash Bodytech with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Perkash Bodytech 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 Innovation & Entrepreneurship industry regulations.
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. Perkash Bodytech needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Perkash Bodytech in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Lumo Bodytech: A Bumpy Journey 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 Lumo Bodytech: A Bumpy Journey 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 Lumo Bodytech: A Bumpy Journey 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 Lumo Bodytech: A Bumpy Journey 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 Lumo Bodytech: A Bumpy Journey 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 Perkash Bodytech needs to make to build a sustainable competitive advantage.