How to Test Your Assumptions SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of How to Test Your Assumptions
This is an MIT Sloan Management Review article. How can managers reduce the number of "unknown unknowns" a project faces? Even projects that employ sophisticated techniques for risk management can encounter surprising derailments. But new research shows that modeling a project's subsystems helps expose risk areas. So, too, can scenario analysis, the use of checklists and data mining. "Directed recognition, which can entail both project design and behavioral approaches, can convert knowable unk-unks [unknown unknowns] to known unknowns,"write the authors.
Swot Analysis of "How to Test Your Assumptions" written by Jon Fjeld includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Unknowns Unknown facing as an external strategic factors. Some of the topics covered in How to Test Your Assumptions case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the How to Test Your Assumptions casestudy better are - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing household debt because of falling income levels, increasing commodity prices,
technology disruption, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of How to Test Your Assumptions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in How to Test Your Assumptions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Unknowns Unknown, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Unknowns Unknown 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 How to Test Your Assumptions can be done for the following purposes –
1. Strategic planning using facts provided in How to Test Your Assumptions case study
2. Improving business portfolio management of Unknowns Unknown
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Unknowns Unknown
Strengths How to Test Your Assumptions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Unknowns Unknown in How to Test Your Assumptions Harvard Business Review case study are -
Ability to recruit top talent
– Unknowns Unknown is one of the leading recruiters in the industry. Managers in the How to Test Your Assumptions are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the How to Test Your Assumptions 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.
Low bargaining power of suppliers
– Suppliers of Unknowns Unknown in the sector have low bargaining power. How to Test Your Assumptions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Unknowns Unknown to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Unknowns Unknown 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 Unknowns Unknown 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 Unknowns Unknown 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.
Innovation driven organization
– Unknowns Unknown is one of the most innovative firm in sector. Manager in How to Test Your Assumptions Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Unknowns Unknown has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study How to Test Your Assumptions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Unknowns Unknown 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.
High brand equity
– Unknowns Unknown has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Unknowns Unknown to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Unknowns Unknown digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Unknowns Unknown 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.
Learning organization
- Unknowns Unknown 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 Unknowns Unknown is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in How to Test Your Assumptions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Unknowns Unknown has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in How to Test Your Assumptions 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.
Weaknesses How to Test Your Assumptions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of How to Test Your Assumptions are -
Capital Spending Reduction
– Even during the low interest decade, Unknowns Unknown 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study How to Test Your Assumptions, it seems that the employees of Unknowns Unknown 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.
Lack of clear differentiation of Unknowns Unknown products
– To increase the profitability and margins on the products, Unknowns Unknown needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Jon Fjeld suggests that, Unknowns Unknown 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study How to Test Your Assumptions, in the dynamic environment Unknowns Unknown has struggled to respond to the nimble upstart competition. Unknowns Unknown has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Unknowns Unknown 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 How to Test Your Assumptions 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 Unknowns Unknown 's lucrative customers.
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 Unknowns Unknown supply chain. Even after few cautionary changes mentioned in the HBR case study - How to Test Your Assumptions, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Unknowns Unknown vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Unknowns Unknown 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, Unknowns Unknown is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study How to Test Your Assumptions can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Unknowns Unknown is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Unknowns Unknown needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Unknowns Unknown to focus more on services rather than just following the product oriented approach.
Opportunities How to Test Your Assumptions | 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 How to Test Your Assumptions are -
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 Unknowns Unknown 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Unknowns Unknown is facing challenges because of the dominance of functional experts in the organization. How to Test Your Assumptions 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Unknowns Unknown can use these opportunities to build new business models that can help the communities that Unknowns Unknown operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Unknowns Unknown 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Unknowns Unknown 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.
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 Unknowns Unknown in the consumer business. Now Unknowns Unknown can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Unknowns Unknown to increase its market reach. Unknowns Unknown 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Unknowns Unknown can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Unknowns Unknown can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Unknowns Unknown 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, How to Test Your Assumptions, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Unknowns Unknown 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. Unknowns Unknown 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.
Creating value in data economy
– The success of analytics program of Unknowns Unknown has opened avenues for new revenue streams for the organization in the industry. This can help Unknowns Unknown to build a more holistic ecosystem as suggested in the How to Test Your Assumptions case study. Unknowns Unknown can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Unknowns Unknown can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. How to Test Your Assumptions 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.
Threats How to Test Your Assumptions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study How to Test Your Assumptions are -
Regulatory challenges
– Unknowns Unknown needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Environmental challenges
– Unknowns Unknown 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. Unknowns Unknown can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Unknowns Unknown with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Unknowns Unknown in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Unknowns Unknown 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 Unknowns Unknown in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Unknowns Unknown 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
– Unknowns Unknown has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Unknowns Unknown needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 Unknowns Unknown.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Unknowns Unknown can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Unknowns Unknown is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Unknowns Unknown business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of How to Test Your Assumptions 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 How to Test Your Assumptions 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 How to Test Your Assumptions 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 How to Test Your Assumptions 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 How to Test Your Assumptions 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 Unknowns Unknown needs to make to build a sustainable competitive advantage.