Case Study Description of Dell: Upcycling Ocean Plastics Through Supply Chain Innovation
This case focuses on Dell's efforts to develop an open-source, scalable, and cost-effective supply chain capable of delivering ocean plastics waste to its production facilities, and potentially to those of partnering companies through a consortium. Piyush Bhargava, vice president of global operations at Dell and leader of Dell's Ocean Plastics Initiative, must deliver a strategic plan for how to proceed with the initiative but has three primary challenges: (1) how to deliver "additionality", (2) how to operationalize an ocean plastics supply chain at scale, and (3) how Dell should approach developing a consortium to ensure meaningful demand for the material. The case presents scientific information on the causes, scale, and impact of the ocean plastics problem and provides background on Dell's involvement in other sustainable packaging initiatives. Students will learn why Dell chose this cause and how it came to be a leading initiative within the company. The case is based on a 2017 Tauber Institute for Global Operations (University of Michigan) summer internship project.
Swot Analysis of "Dell: Upcycling Ocean Plastics Through Supply Chain Innovation" written by Ravi Anupindi, Andrew Hoffman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Plastics Ocean facing as an external strategic factors. Some of the topics covered in Dell: Upcycling Ocean Plastics Through Supply Chain Innovation case study are - Strategic Management Strategies, Supply chain, Sustainability and Technology & Operations.
Some of the macro environment factors that can be used to understand the Dell: Upcycling Ocean Plastics Through Supply Chain Innovation casestudy better are - – central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, there is backlash against globalization, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Dell: Upcycling Ocean Plastics Through Supply Chain Innovation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dell: Upcycling Ocean Plastics Through Supply Chain Innovation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Plastics Ocean, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Plastics Ocean 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation can be done for the following purposes –
1. Strategic planning using facts provided in Dell: Upcycling Ocean Plastics Through Supply Chain Innovation case study
2. Improving business portfolio management of Plastics Ocean
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Plastics Ocean
Strengths Dell: Upcycling Ocean Plastics Through Supply Chain Innovation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Plastics Ocean in Dell: Upcycling Ocean Plastics Through Supply Chain Innovation Harvard Business Review case study are -
Training and development
– Plastics Ocean has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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.
High switching costs
– The high switching costs that Plastics Ocean 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.
Cross disciplinary teams
– Horizontal connected teams at the Plastics Ocean 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.
Ability to recruit top talent
– Plastics Ocean is one of the leading recruiters in the industry. Managers in the Dell: Upcycling Ocean Plastics Through Supply Chain Innovation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Plastics Ocean 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Plastics Ocean in the sector have low bargaining power. Dell: Upcycling Ocean Plastics Through Supply Chain Innovation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Plastics Ocean to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Plastics Ocean digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Plastics Ocean 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.
Successful track record of launching new products
– Plastics Ocean has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Plastics Ocean 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.
Effective Research and Development (R&D)
– Plastics Ocean 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Plastics Ocean is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Plastics Ocean is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ravi Anupindi, Andrew Hoffman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Plastics Ocean in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Dell: Upcycling Ocean Plastics Through Supply Chain Innovation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dell: Upcycling Ocean Plastics Through Supply Chain Innovation are -
High bargaining power of channel partners
– Because of the regulatory requirements, Ravi Anupindi, Andrew Hoffman suggests that, Plastics Ocean 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.
Low market penetration in new markets
– Outside its home market of Plastics Ocean, firm in the HBR case study Dell: Upcycling Ocean Plastics Through Supply Chain Innovation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Dell: Upcycling Ocean Plastics Through Supply Chain Innovation, is just above the industry average. Plastics Ocean 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.
Increasing silos among functional specialists
– The organizational structure of Plastics Ocean is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Plastics Ocean needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Plastics Ocean to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Plastics Ocean 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 - Dell: Upcycling Ocean Plastics Through Supply Chain Innovation should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Plastics Ocean products
– To increase the profitability and margins on the products, Plastics Ocean needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation can leverage the sales team experience to cultivate customer relationships as Plastics Ocean is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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 Plastics Ocean has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Plastics Ocean has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As Dell: Upcycling Ocean Plastics Through Supply Chain Innovation HBR case study mentions - Plastics Ocean 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.
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 Plastics Ocean supply chain. Even after few cautionary changes mentioned in the HBR case study - Dell: Upcycling Ocean Plastics Through Supply Chain Innovation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Plastics Ocean vulnerable to further global disruptions in South East Asia.
Opportunities Dell: Upcycling Ocean Plastics Through Supply Chain Innovation | 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation are -
Building a culture of innovation
– managers at Plastics Ocean 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 Technology & Operations segment.
Learning at scale
– Online learning technologies has now opened space for Plastics Ocean to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Plastics Ocean 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Plastics Ocean is facing challenges because of the dominance of functional experts in the organization. Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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.
Creating value in data economy
– The success of analytics program of Plastics Ocean has opened avenues for new revenue streams for the organization in the industry. This can help Plastics Ocean to build a more holistic ecosystem as suggested in the Dell: Upcycling Ocean Plastics Through Supply Chain Innovation case study. Plastics Ocean can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Plastics Ocean can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Plastics Ocean 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Plastics Ocean to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Plastics Ocean in the consumer business. Now Plastics Ocean 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 Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Plastics Ocean 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. Plastics Ocean 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.
Loyalty marketing
– Plastics Ocean 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Plastics Ocean 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.
Better consumer reach
– The expansion of the 5G network will help Plastics Ocean to increase its market reach. Plastics Ocean 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.
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 Plastics Ocean 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dell: Upcycling Ocean Plastics Through Supply Chain Innovation are -
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.
Environmental challenges
– Plastics Ocean 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. Plastics Ocean can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Consumer confidence and its impact on Plastics Ocean 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.
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 Plastics Ocean business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Plastics Ocean can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Plastics Ocean 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.
Regulatory challenges
– Plastics Ocean 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 Technology & Operations industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Plastics Ocean with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Plastics Ocean is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Plastics Ocean needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Increasing wage structure of Plastics Ocean
– 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 Plastics Ocean.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Plastics Ocean 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Plastics Ocean in the Technology & Operations industry. The Technology & Operations 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.
Weighted SWOT Analysis of Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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 Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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 Plastics Ocean needs to make to build a sustainable competitive advantage.
