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 - – increasing household debt because of falling income levels, geopolitical disruptions, challanges to central banks by blockchain based private currencies, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, 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 -
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.
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.
High brand equity
– Plastics Ocean has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Plastics Ocean to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Technology & Operations field
– Plastics Ocean 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 Plastics Ocean in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Diverse revenue streams
– Plastics Ocean is present in almost all the verticals within the industry. This has provided firm in Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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.
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.
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.
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.
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.
Sustainable margins compare to other players in Technology & Operations industry
– Dell: Upcycling Ocean Plastics Through Supply Chain Innovation firm has clearly differentiated products in the market place. This has enabled Plastics Ocean to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Plastics Ocean to invest into research and development (R&D) and innovation.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Dell: Upcycling Ocean Plastics Through Supply Chain Innovation, in the dynamic environment Plastics Ocean has struggled to respond to the nimble upstart competition. Plastics Ocean has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Plastics Ocean 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 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 operating costs
– Compare to the competitors, firm in the HBR case study Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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 Plastics Ocean 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Plastics Ocean 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.
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.
Need for greater diversity
– Plastics Ocean 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.
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.
High cash cycle compare to competitors
Plastics Ocean has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities 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 -
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Plastics Ocean in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Plastics Ocean can develop new processes and procedures in Technology & Operations 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.
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.
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.
Buying journey improvements
– Plastics Ocean can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dell: Upcycling Ocean Plastics Through Supply Chain Innovation 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Plastics Ocean 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, Dell: Upcycling Ocean Plastics Through Supply Chain Innovation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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 -
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.
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.
High dependence on third party suppliers
– Plastics Ocean 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.
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.
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 .
Technology acceleration in Forth Industrial Revolution
– Plastics Ocean has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Plastics Ocean needs to keep up with the evolution of technology in the Technology & Operations 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.
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.
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.
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.
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.
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.
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.
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.