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 - – increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing transportation and logistics costs, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, geopolitical disruptions,
there is backlash against globalization, wage bills are increasing, 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 -
High brand equity
– Makerbot 3d has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Makerbot 3d to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Organizational Resilience of Makerbot 3d
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Makerbot 3d does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Strong track record of project management
– Makerbot 3d is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Makerbot 3d digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Makerbot 3d 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.
Ability to recruit top talent
– Makerbot 3d is one of the leading recruiters in the industry. Managers in the MakerBot: Challenges in Building a New Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Makerbot 3d in the sector have low bargaining power. MakerBot: Challenges in Building a New Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Makerbot 3d to manage not only supply disruptions but also source products at highly competitive prices.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Makerbot 3d 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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Makerbot 3d is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study MakerBot: Challenges in Building a New Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Interest costs
– Compare to the competition, Makerbot 3d 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.
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.
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.
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.
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.
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 -
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 Makerbot 3d in the consumer business. Now Makerbot 3d 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 Makerbot 3d 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.
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.
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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Makerbot 3d is facing challenges because of the dominance of functional experts in the organization. MakerBot: Challenges in Building a New Industry 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Makerbot 3d 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 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.
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 -
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.
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.
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.
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Makerbot 3d is facing in Innovation & Entrepreneurship 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. Makerbot 3d needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study MakerBot: Challenges in Building a New Industry, Makerbot 3d 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 .
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 Makerbot 3d business can come under increasing regulations regarding data privacy, data security, etc.
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 .
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.