Numenta (in 2010): The Age of Truly Intelligent Machines? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Numenta (in 2010): The Age of Truly Intelligent Machines?
Jeff Hawkins, founder of Palm Computing, wants software that "thinks" like the human brain. His latest company, Numenta, has developed "Hierarchical Temporal Memory" (HTM), a cutting-edge pattern-recognition software that functions as the human brain does. Hawkins struggles with how to license Numenta's software while protecting Numenta's intellectual property. He must also balance moving his research forward with creating a profit and sustaining his company. Hawkins, who doesn't want to lose control of this company like he lost control of Palm Computing, must decide what strategic alliances to make or not make to ensure that his dream of making computers "more human" becomes reality.
Authors :: Frank T. Rothaermel, Wei Zhang, Marne L. Arthaud-Day
Swot Analysis of "Numenta (in 2010): The Age of Truly Intelligent Machines?" written by Frank T. Rothaermel, Wei Zhang, Marne L. Arthaud-Day includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hawkins Numenta facing as an external strategic factors. Some of the topics covered in Numenta (in 2010): The Age of Truly Intelligent Machines? case study are - Strategic Management Strategies, Data, Joint ventures, Leadership, Organizational culture, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Numenta (in 2010): The Age of Truly Intelligent Machines? casestudy better are - – there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models,
wage bills are increasing, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Numenta (in 2010): The Age of Truly Intelligent Machines?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Numenta (in 2010): The Age of Truly Intelligent Machines? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hawkins Numenta, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hawkins Numenta 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 Numenta (in 2010): The Age of Truly Intelligent Machines? can be done for the following purposes –
1. Strategic planning using facts provided in Numenta (in 2010): The Age of Truly Intelligent Machines? case study
2. Improving business portfolio management of Hawkins Numenta
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 Hawkins Numenta
Strengths Numenta (in 2010): The Age of Truly Intelligent Machines? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hawkins Numenta in Numenta (in 2010): The Age of Truly Intelligent Machines? Harvard Business Review case study are -
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Numenta (in 2010): The Age of Truly Intelligent Machines? firm has clearly differentiated products in the market place. This has enabled Hawkins Numenta to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Hawkins Numenta to invest into research and development (R&D) and innovation.
Strong track record of project management
– Hawkins Numenta is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Hawkins Numenta 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 Numenta (in 2010): The Age of Truly Intelligent Machines? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Hawkins Numenta
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hawkins Numenta does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Hawkins Numenta in the sector have low bargaining power. Numenta (in 2010): The Age of Truly Intelligent Machines? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hawkins Numenta to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Hawkins Numenta has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hawkins Numenta to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Hawkins Numenta is present in almost all the verticals within the industry. This has provided firm in Numenta (in 2010): The Age of Truly Intelligent Machines? 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.
Innovation driven organization
– Hawkins Numenta is one of the most innovative firm in sector. Manager in Numenta (in 2010): The Age of Truly Intelligent Machines? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Hawkins Numenta in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Numenta (in 2010): The Age of Truly Intelligent Machines? 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.
Learning organization
- Hawkins Numenta 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 Hawkins Numenta is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Numenta (in 2010): The Age of Truly Intelligent Machines? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Hawkins Numenta digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hawkins Numenta 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.
Weaknesses Numenta (in 2010): The Age of Truly Intelligent Machines? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Numenta (in 2010): The Age of Truly Intelligent Machines? are -
High cash cycle compare to competitors
Hawkins Numenta 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 operating costs
– Compare to the competitors, firm in the HBR case study Numenta (in 2010): The Age of Truly Intelligent Machines? 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 Hawkins Numenta 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Frank T. Rothaermel, Wei Zhang, Marne L. Arthaud-Day suggests that, Hawkins Numenta 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Numenta (in 2010): The Age of Truly Intelligent Machines? 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 Hawkins Numenta has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Hawkins Numenta has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Numenta (in 2010): The Age of Truly Intelligent Machines?, in the dynamic environment Hawkins Numenta has struggled to respond to the nimble upstart competition. Hawkins Numenta has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Numenta (in 2010): The Age of Truly Intelligent Machines?, is just above the industry average. Hawkins Numenta 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 Numenta (in 2010): The Age of Truly Intelligent Machines?, it seems that the employees of Hawkins Numenta 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.
Slow to strategic competitive environment developments
– As Numenta (in 2010): The Age of Truly Intelligent Machines? HBR case study mentions - Hawkins Numenta 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hawkins Numenta is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Numenta (in 2010): The Age of Truly Intelligent Machines? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Hawkins Numenta products
– To increase the profitability and margins on the products, Hawkins Numenta needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Numenta (in 2010): The Age of Truly Intelligent Machines? | 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 Numenta (in 2010): The Age of Truly Intelligent Machines? are -
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. Hawkins Numenta 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. Hawkins Numenta 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.
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. Hawkins Numenta can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Hawkins Numenta has opened avenues for new revenue streams for the organization in the industry. This can help Hawkins Numenta to build a more holistic ecosystem as suggested in the Numenta (in 2010): The Age of Truly Intelligent Machines? case study. Hawkins Numenta can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hawkins Numenta 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hawkins Numenta 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hawkins Numenta is facing challenges because of the dominance of functional experts in the organization. Numenta (in 2010): The Age of Truly Intelligent Machines? 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hawkins Numenta can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hawkins Numenta 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, Numenta (in 2010): The Age of Truly Intelligent Machines?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Hawkins Numenta to increase its market reach. Hawkins Numenta 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.
Developing new processes and practices
– Hawkins Numenta 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.
Buying journey improvements
– Hawkins Numenta can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Numenta (in 2010): The Age of Truly Intelligent Machines? 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hawkins Numenta 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 Hawkins Numenta to hire the very best people irrespective of their geographical location.
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. Hawkins Numenta can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Numenta (in 2010): The Age of Truly Intelligent Machines? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Numenta (in 2010): The Age of Truly Intelligent Machines? are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hawkins Numenta with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Hawkins Numenta 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.
Regulatory challenges
– Hawkins Numenta 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.
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. Hawkins Numenta can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Hawkins Numenta 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.
Increasing wage structure of Hawkins Numenta
– 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 Hawkins Numenta.
High dependence on third party suppliers
– Hawkins Numenta high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hawkins Numenta 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
– Hawkins Numenta has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Hawkins Numenta 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.
Environmental challenges
– Hawkins Numenta 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. Hawkins Numenta can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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. Hawkins Numenta needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hawkins Numenta 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 Numenta (in 2010): The Age of Truly Intelligent Machines? .
Weighted SWOT Analysis of Numenta (in 2010): The Age of Truly Intelligent Machines? 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 Numenta (in 2010): The Age of Truly Intelligent Machines? 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 Numenta (in 2010): The Age of Truly Intelligent Machines? 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 Numenta (in 2010): The Age of Truly Intelligent Machines? 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 Numenta (in 2010): The Age of Truly Intelligent Machines? 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 Hawkins Numenta needs to make to build a sustainable competitive advantage.