MakerBot: Challenges in Building a New Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of MakerBot: Challenges in Building a New Industry
Like Apple did, Makerbot Industries offered its first product in the form of a kit. Enthusiasts, who wanted to build their own 3D printer and enter the brave new world of personal manufacturing could create any object in their imagination-as long as it was no bigger than a coffee cup. The founders of Makerbot--Bre Pettis, Adam Mayer and Zach Smith--were each passionate to bring affordable 3D printing to the masses. Moreover, they would not betray their commitment to open technology and open innovation. Above all else, they wanted to make their 3D printers understandable to and modifiable by users. They did this by keeping every aspect of their 3D printers' hardware and software open and adaptable. Through the creation of Thingaverse.com (a universe of things), an expanding army of Makerbot enthusiasts could upload, share and modify a growing array of 3D objects including toys, small inventions, medical devices and even architectural models. What advantages did Makerbot's strategy of openness bestow? How was Makerbot positioned for future battles in the emerging personal manufacturing industry with Hewlett-Packard and others? Lastly, how did Makerbot turn a unique research endeavor into a powerful idea attracting venture funds from Jeff Bezos, The New York Times and venture capitalists?
Swot Analysis of "MakerBot: Challenges in Building a New Industry" written by Erik Noyes, Ruth Gilleran includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Makerbot 3d facing as an external strategic factors. Some of the topics covered in MakerBot: Challenges in Building a New Industry case study are - Strategic Management Strategies, Product development, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the MakerBot: Challenges in Building a New Industry casestudy better are - – there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
there is increasing trade war between United States & China, increasing commodity prices, etc
Introduction to SWOT Analysis of MakerBot: Challenges in Building a New Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MakerBot: Challenges in Building a New Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Makerbot 3d, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Makerbot 3d 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 MakerBot: Challenges in Building a New Industry can be done for the following purposes –
1. Strategic planning using facts provided in MakerBot: Challenges in Building a New Industry case study
2. Improving business portfolio management of Makerbot 3d
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 Makerbot 3d
Strengths MakerBot: Challenges in Building a New Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Makerbot 3d in MakerBot: Challenges in Building a New Industry Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Makerbot 3d in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Makerbot 3d 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 Erik Noyes, Ruth Gilleran 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– MakerBot: Challenges in Building a New Industry firm has clearly differentiated products in the market place. This has enabled Makerbot 3d to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Makerbot 3d to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Makerbot 3d 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.
Training and development
– Makerbot 3d has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in MakerBot: Challenges in Building a New Industry 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.
Diverse revenue streams
– Makerbot 3d is present in almost all the verticals within the industry. This has provided firm in MakerBot: Challenges in Building a New Industry 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.
Successful track record of launching new products
– Makerbot 3d has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Makerbot 3d 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.
Operational resilience
– The operational resilience strategy in the MakerBot: Challenges in Building a New Industry Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Innovation & Entrepreneurship field
– Makerbot 3d 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 Makerbot 3d in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Makerbot 3d 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 MakerBot: Challenges in Building a New Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Makerbot 3d 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.
Innovation driven organization
– Makerbot 3d is one of the most innovative firm in sector. Manager in MakerBot: Challenges in Building a New Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses MakerBot: Challenges in Building a New Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MakerBot: Challenges in Building a New Industry are -
Slow to strategic competitive environment developments
– As MakerBot: Challenges in Building a New Industry HBR case study mentions - Makerbot 3d 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 star products
– The top 2 products and services of the firm as mentioned in the MakerBot: Challenges in Building a New Industry 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 Makerbot 3d has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study MakerBot: Challenges in Building a New Industry, in the dynamic environment Makerbot 3d has struggled to respond to the nimble upstart competition. Makerbot 3d has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Makerbot 3d is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Makerbot 3d needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Makerbot 3d to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Makerbot 3d 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.
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 Makerbot 3d supply chain. Even after few cautionary changes mentioned in the HBR case study - MakerBot: Challenges in Building a New Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Makerbot 3d vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Makerbot 3d products
– To increase the profitability and margins on the products, Makerbot 3d 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 MakerBot: Challenges in Building a New Industry 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 MakerBot: Challenges in Building a New Industry can leverage the sales team experience to cultivate customer relationships as Makerbot 3d is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Makerbot 3d has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Makerbot 3d even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Makerbot 3d 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 bargaining power of channel partners
– Because of the regulatory requirements, Erik Noyes, Ruth Gilleran suggests that, Makerbot 3d 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.
Opportunities MakerBot: Challenges in Building a New Industry | 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 MakerBot: Challenges in Building a New Industry are -
Better consumer reach
– The expansion of the 5G network will help Makerbot 3d to increase its market reach. Makerbot 3d 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Makerbot 3d can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Makerbot 3d 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.
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. Makerbot 3d can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Makerbot 3d can use these opportunities to build new business models that can help the communities that Makerbot 3d operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Learning at scale
– Online learning technologies has now opened space for Makerbot 3d 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.
Creating value in data economy
– The success of analytics program of Makerbot 3d has opened avenues for new revenue streams for the organization in the industry. This can help Makerbot 3d to build a more holistic ecosystem as suggested in the MakerBot: Challenges in Building a New Industry case study. Makerbot 3d can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Makerbot 3d 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 Makerbot 3d to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Makerbot 3d 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, MakerBot: Challenges in Building a New Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Makerbot 3d 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.
Leveraging digital technologies
– Makerbot 3d 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.
Developing new processes and practices
– Makerbot 3d 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.
Using analytics as competitive advantage
– Makerbot 3d 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 MakerBot: Challenges in Building a New Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Makerbot 3d to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats MakerBot: Challenges in Building a New Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MakerBot: Challenges in Building a New Industry are -
Regulatory challenges
– Makerbot 3d needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
Stagnating economy with rate increase
– Makerbot 3d 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Makerbot 3d 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 MakerBot: Challenges in Building a New Industry .
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 Makerbot 3d.
Consumer confidence and its impact on Makerbot 3d 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.
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 Makerbot 3d in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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. Makerbot 3d can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Makerbot 3d 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Makerbot 3d in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Technology acceleration in Forth Industrial Revolution
– Makerbot 3d has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Makerbot 3d needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Makerbot 3d 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Makerbot 3d with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of MakerBot: Challenges in Building a New Industry 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 MakerBot: Challenges in Building a New Industry 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 MakerBot: Challenges in Building a New Industry 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 MakerBot: Challenges in Building a New Industry 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 MakerBot: Challenges in Building a New Industry 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 Makerbot 3d needs to make to build a sustainable competitive advantage.
