X PRIZE Foundation: Revolution Through Competition SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of X PRIZE Foundation: Revolution Through Competition

In October 2004, SpaceShipOne rocketed into space, winning the $10 million Ansari X PRIZE. This competition for the first privately funded, manned spaceflight was organized by the X PRIZE Foundation, and attracted 26 competitors, who had spent more than $100 million in pursuit of the prize. The success of SpaceShipOne generated intense media and public interest. Many of the competitors for the Ansari X PRIZE also planned to continue their efforts to develop commercial spaceflight businesses. After this success, Peter Diamandis, founder and CEO of the X PRIZE Foundation considered the future of the foundation. He saw three options: shutting down, continuing with a focus on space, or creating a "world-class prize institute that uses the prize-incentive model to solve today's grand challenges." He chose the third alternative, with the vision of developing 10-15 prize competitions. The foundation chose to work on fields including space, medicine and genomics, energy and transportation, education, and other social challenges. Describes lessons learned about prize competitions through the Ansari X PRIZE program. Discusses issues in creating and operating a successful competition, as well as the advantages of using incentive prizes, including bringing new thinking to bear on difficult problems and paying out only when an important goal is accomplished (paying for results, not effort). Poses several problems facing the Foundation as it begins to focus on fields outside of space: could prize competitions work in fields that were not technology-centric (such as poverty); could the organization scale up to support as many as 10-15 competitions; and what areas should the foundation focus on. Finally, could the prize model revolutionize philanthropy by using financial incentives to stimulate investment in important fields and leverage philanthropic dollars by paying only for results?

Authors :: David W. Hoyt, James A. Phills

Topics :: Innovation & Entrepreneurship

Tags :: Motivating people, Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "X PRIZE Foundation: Revolution Through Competition" written by David W. Hoyt, James A. Phills includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Prize Foundation facing as an external strategic factors. Some of the topics covered in X PRIZE Foundation: Revolution Through Competition case study are - Strategic Management Strategies, Motivating people, Social enterprise, Social responsibility and Innovation & Entrepreneurship.

Some of the macro environment factors that can be used to understand the X PRIZE Foundation: Revolution Through Competition casestudy better are - – increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, increasing energy prices, etc

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Introduction to SWOT Analysis of X PRIZE Foundation: Revolution Through Competition

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in X PRIZE Foundation: Revolution Through Competition case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Prize Foundation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Prize Foundation 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of X PRIZE Foundation: Revolution Through Competition can be done for the following purposes –
1. Strategic planning using facts provided in X PRIZE Foundation: Revolution Through Competition case study
2. Improving business portfolio management of Prize Foundation
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 Prize Foundation

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Strengths X PRIZE Foundation: Revolution Through Competition | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Prize Foundation in X PRIZE Foundation: Revolution Through Competition Harvard Business Review case study are -

Highly skilled collaborators

– Prize Foundation 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 X PRIZE Foundation: Revolution Through Competition HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Organizational Resilience of Prize Foundation

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Prize Foundation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Ability to recruit top talent

– Prize Foundation is one of the leading recruiters in the industry. Managers in the X PRIZE Foundation: Revolution Through Competition are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Successful track record of launching new products

– Prize Foundation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Prize Foundation 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.

Low bargaining power of suppliers

– Suppliers of Prize Foundation in the sector have low bargaining power. X PRIZE Foundation: Revolution Through Competition has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Prize Foundation to manage not only supply disruptions but also source products at highly competitive prices.

High brand equity

– Prize Foundation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Prize Foundation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to lead change in Innovation & Entrepreneurship field

– Prize Foundation 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 Prize Foundation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Training and development

– Prize Foundation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in X PRIZE Foundation: Revolution Through Competition 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.

Effective Research and Development (R&D)

– Prize Foundation 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 X PRIZE Foundation: Revolution Through Competition - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Cross disciplinary teams

– Horizontal connected teams at the Prize Foundation 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.

Learning organization

- Prize Foundation 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 Prize Foundation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in X PRIZE Foundation: Revolution Through Competition Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Innovation driven organization

– Prize Foundation is one of the most innovative firm in sector. Manager in X PRIZE Foundation: Revolution Through Competition Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

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Weaknesses X PRIZE Foundation: Revolution Through Competition | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of X PRIZE Foundation: Revolution Through Competition are -

Skills based hiring

– The stress on hiring functional specialists at Prize Foundation 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 star products

– The top 2 products and services of the firm as mentioned in the X PRIZE Foundation: Revolution Through Competition 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 Prize Foundation has relatively successful track record of launching new products.

Increasing silos among functional specialists

– The organizational structure of Prize Foundation is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Prize Foundation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Prize Foundation to focus more on services rather than just following the product oriented approach.

High bargaining power of channel partners

– Because of the regulatory requirements, David W. Hoyt, James A. Phills suggests that, Prize Foundation 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.

Workers concerns about automation

– As automation is fast increasing in the segment, Prize Foundation needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

Interest costs

– Compare to the competition, Prize Foundation 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study X PRIZE Foundation: Revolution Through Competition, in the dynamic environment Prize Foundation has struggled to respond to the nimble upstart competition. Prize Foundation 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 X PRIZE Foundation: Revolution Through Competition HBR case study mentions - Prize Foundation 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.

Need for greater diversity

– Prize Foundation 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study X PRIZE Foundation: Revolution Through Competition, it seems that the employees of Prize Foundation 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 Prize Foundation products

– To increase the profitability and margins on the products, Prize Foundation needs to provide more differentiated products than what it is currently offering in the marketplace.

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Opportunities X PRIZE Foundation: Revolution Through Competition | 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 X PRIZE Foundation: Revolution Through Competition are -

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 Prize Foundation in the consumer business. Now Prize Foundation can target international markets with far fewer capital restrictions requirements than the existing system.

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. Prize Foundation can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Buying journey improvements

– Prize Foundation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. X PRIZE Foundation: Revolution Through Competition 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.

Creating value in data economy

– The success of analytics program of Prize Foundation has opened avenues for new revenue streams for the organization in the industry. This can help Prize Foundation to build a more holistic ecosystem as suggested in the X PRIZE Foundation: Revolution Through Competition case study. Prize Foundation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Prize Foundation 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, X PRIZE Foundation: Revolution Through Competition, 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 Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Prize Foundation 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. Prize Foundation 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.

Using analytics as competitive advantage

– Prize Foundation 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 X PRIZE Foundation: Revolution Through Competition - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Prize Foundation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Building a culture of innovation

– managers at Prize Foundation 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 Innovation & Entrepreneurship segment.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Prize Foundation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Prize Foundation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.

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 Prize Foundation 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.

Developing new processes and practices

– Prize Foundation can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Prize Foundation 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 Prize Foundation to hire the very best people irrespective of their geographical location.

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Threats X PRIZE Foundation: Revolution Through Competition External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study X PRIZE Foundation: Revolution Through Competition 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 Prize Foundation business can come under increasing regulations regarding data privacy, data security, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Prize Foundation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Increasing wage structure of Prize Foundation

– 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 Prize Foundation.

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.

Environmental challenges

– Prize Foundation 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. Prize Foundation can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.

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 Prize Foundation in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.

Stagnating economy with rate increase

– Prize Foundation 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study X PRIZE Foundation: Revolution Through Competition, Prize Foundation 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 .

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. Prize Foundation 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. Prize Foundation needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.

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.

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. Prize Foundation 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.

Consumer confidence and its impact on Prize Foundation 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.

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Weighted SWOT Analysis of X PRIZE Foundation: Revolution Through Competition 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 X PRIZE Foundation: Revolution Through Competition 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 X PRIZE Foundation: Revolution Through Competition 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 X PRIZE Foundation: Revolution Through Competition 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 X PRIZE Foundation: Revolution Through Competition 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 Prize Foundation needs to make to build a sustainable competitive advantage.

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