After 3 years of losses and under legal threats from their landlord, a husband and wife team are faced with shutting the company down, buying time with the landlord or turning to their parents for additional funds. Despite opening a new location and seeing that sales were up from last year, their financial statements were still reporting losses forcing them to consider what steps to take to turn children's retail clothing business around.The Thompsons have fulfilled their dream of running their own business, but after two years continue to borrow money from their parents, and are facing an angry landlord looking for back rent. Opening a 2nd location in a more prosperous mall seems to have helped revenues, but they are facing high year end inventory levels necessitating markdowns and reflecting the risks of the "fashion" oriented children's retail clothing business. Having their own business had put a strain in their lives and relations with their family. Her parents provided initial and ongoing funding and their son, a lawyer, has voiced his concern about the local attorney's competence, who was suggesting they consider bankruptcy. As they face the peak Christmas season, they realize that they may lose their "dream child" and are not sure if it is the way they are running the business, the financial reports or their locations.
Swot Analysis of "Dragonfly Corporation" written by James M. Sharpe, Howard H. Stevenson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Landlord Parents facing as an external strategic factors. Some of the topics covered in Dragonfly Corporation case study are - Strategic Management Strategies, Entrepreneurial management, Financial analysis, Financial management, Recession and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Dragonfly Corporation casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, increasing energy prices, wage bills are increasing, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Dragonfly Corporation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dragonfly Corporation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Landlord Parents, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Landlord Parents 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 Dragonfly Corporation can be done for the following purposes –
1. Strategic planning using facts provided in Dragonfly Corporation case study
2. Improving business portfolio management of Landlord Parents
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 Landlord Parents
Strengths Dragonfly Corporation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Landlord Parents in Dragonfly Corporation Harvard Business Review case study are -
Successful track record of launching new products
– Landlord Parents has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Landlord Parents 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.
Learning organization
- Landlord Parents 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 Landlord Parents is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dragonfly Corporation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Landlord Parents is one of the most innovative firm in sector. Manager in Dragonfly Corporation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Landlord Parents in the sector have low bargaining power. Dragonfly Corporation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Landlord Parents to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Dragonfly Corporation firm has clearly differentiated products in the market place. This has enabled Landlord Parents to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Landlord Parents to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Landlord Parents 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.
Organizational Resilience of Landlord Parents
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Landlord Parents does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Innovation & Entrepreneurship field
– Landlord Parents 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 Landlord Parents 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 Landlord Parents digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Landlord Parents 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.
High switching costs
– The high switching costs that Landlord Parents 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.
Operational resilience
– The operational resilience strategy in the Dragonfly Corporation 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.
Highly skilled collaborators
– Landlord Parents 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 Dragonfly Corporation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Dragonfly Corporation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dragonfly Corporation are -
Low market penetration in new markets
– Outside its home market of Landlord Parents, firm in the HBR case study Dragonfly Corporation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Landlord Parents products
– To increase the profitability and margins on the products, Landlord Parents needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Landlord Parents is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Landlord Parents needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Landlord Parents to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Dragonfly Corporation 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 Landlord Parents 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Dragonfly Corporation, is just above the industry average. Landlord Parents needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Dragonfly Corporation, it seems that the employees of Landlord Parents 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.
Interest costs
– Compare to the competition, Landlord Parents 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.
Need for greater diversity
– Landlord Parents 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.
Slow to strategic competitive environment developments
– As Dragonfly Corporation HBR case study mentions - Landlord Parents 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 bargaining power of channel partners
– Because of the regulatory requirements, James M. Sharpe, Howard H. Stevenson suggests that, Landlord Parents 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Landlord Parents is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Dragonfly Corporation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Dragonfly Corporation | 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 Dragonfly Corporation are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Landlord Parents can use these opportunities to build new business models that can help the communities that Landlord Parents operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Landlord Parents 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.
Buying journey improvements
– Landlord Parents can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dragonfly Corporation 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 Landlord Parents has opened avenues for new revenue streams for the organization in the industry. This can help Landlord Parents to build a more holistic ecosystem as suggested in the Dragonfly Corporation case study. Landlord Parents can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Landlord Parents 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.
Manufacturing automation
– Landlord Parents can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Landlord Parents 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.
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. Landlord Parents can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Landlord Parents 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, Dragonfly Corporation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Landlord Parents 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.
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. Landlord Parents 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. Landlord Parents 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.
Better consumer reach
– The expansion of the 5G network will help Landlord Parents to increase its market reach. Landlord Parents 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.
Leveraging digital technologies
– Landlord Parents 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.
Threats Dragonfly Corporation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dragonfly Corporation are -
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 Landlord Parents.
Environmental challenges
– Landlord Parents 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. Landlord Parents can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Consumer confidence and its impact on Landlord Parents 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 Landlord Parents in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Dragonfly Corporation, Landlord Parents 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Landlord Parents 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.
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. Landlord Parents 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
– Landlord Parents has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Landlord Parents 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.
Regulatory challenges
– Landlord Parents 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.
Shortening product life cycle
– it is one of the major threat that Landlord Parents is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Landlord Parents 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.
Stagnating economy with rate increase
– Landlord Parents 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 wage structure of Landlord Parents
– 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 Landlord Parents.
Weighted SWOT Analysis of Dragonfly Corporation 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 Dragonfly Corporation 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 Dragonfly Corporation 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 Dragonfly Corporation 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 Dragonfly Corporation 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 Landlord Parents needs to make to build a sustainable competitive advantage.