Case Study Description of Necessary Illusions and Dangerous Delusions
New entrepreneurs are in a tough spot: sixty-five per cent of seed-round startups in North America never make it to the next level of funding, and just 12 per cent end up successfully delivering a product or service. Why even try? "Because my idea is better than all the others, and the numbers don't apply to me." We all have such 'necessary illusions' in our minds, says the author. Dangerous delusions, on the other hand, are just that. The question is, how to distinguish between necessary illusions and dangerous delusions? He argues that the answer is to become an experimentalist about one's own life and business, which forces you to take an outsider's view of it.
Swot Analysis of "Necessary Illusions and Dangerous Delusions" written by Mihena Moldoveanu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Illusions Delusions facing as an external strategic factors. Some of the topics covered in Necessary Illusions and Dangerous Delusions case study are - Strategic Management Strategies, Innovation, Strategy and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Necessary Illusions and Dangerous Delusions casestudy better are - – there is backlash against globalization, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, wage bills are increasing,
talent flight as more people leaving formal jobs, technology disruption, etc
Introduction to SWOT Analysis of Necessary Illusions and Dangerous Delusions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Necessary Illusions and Dangerous Delusions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Illusions Delusions, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Illusions Delusions 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 Necessary Illusions and Dangerous Delusions can be done for the following purposes –
1. Strategic planning using facts provided in Necessary Illusions and Dangerous Delusions case study
2. Improving business portfolio management of Illusions Delusions
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 Illusions Delusions
Strengths Necessary Illusions and Dangerous Delusions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Illusions Delusions in Necessary Illusions and Dangerous Delusions Harvard Business Review case study are -
High switching costs
– The high switching costs that Illusions Delusions 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.
Training and development
– Illusions Delusions has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Necessary Illusions and Dangerous Delusions Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Illusions Delusions 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 Necessary Illusions and Dangerous Delusions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Illusions Delusions 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 Mihena Moldoveanu 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.
Ability to recruit top talent
– Illusions Delusions is one of the leading recruiters in the industry. Managers in the Necessary Illusions and Dangerous Delusions 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 Illusions Delusions in the sector have low bargaining power. Necessary Illusions and Dangerous Delusions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Illusions Delusions to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Illusions Delusions 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 Illusions Delusions is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Necessary Illusions and Dangerous Delusions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Illusions Delusions in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Illusions Delusions is one of the most innovative firm in sector. Manager in Necessary Illusions and Dangerous Delusions Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Illusions Delusions
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Illusions Delusions does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Illusions Delusions has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Illusions Delusions 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.
Strong track record of project management
– Illusions Delusions is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Necessary Illusions and Dangerous Delusions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Necessary Illusions and Dangerous Delusions are -
Low market penetration in new markets
– Outside its home market of Illusions Delusions, firm in the HBR case study Necessary Illusions and Dangerous Delusions needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Illusions Delusions 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 bargaining power of channel partners
– Because of the regulatory requirements, Mihena Moldoveanu suggests that, Illusions Delusions 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.
Need for greater diversity
– Illusions Delusions 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.
Skills based hiring
– The stress on hiring functional specialists at Illusions Delusions 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.
Lack of clear differentiation of Illusions Delusions products
– To increase the profitability and margins on the products, Illusions Delusions needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Illusions Delusions 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.
Slow decision making process
– As mentioned earlier in the report, Illusions Delusions 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. Illusions Delusions 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.
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 Illusions Delusions supply chain. Even after few cautionary changes mentioned in the HBR case study - Necessary Illusions and Dangerous Delusions, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Illusions Delusions vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Illusions Delusions is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Illusions Delusions needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Illusions Delusions to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Illusions Delusions is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Necessary Illusions and Dangerous Delusions 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 Necessary Illusions and Dangerous Delusions | 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 Necessary Illusions and Dangerous Delusions are -
Learning at scale
– Online learning technologies has now opened space for Illusions Delusions 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Illusions Delusions 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 Illusions Delusions to hire the very best people irrespective of their geographical location.
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. Illusions Delusions 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. Illusions Delusions 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 Illusions Delusions to increase its market reach. Illusions Delusions 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Illusions Delusions can use these opportunities to build new business models that can help the communities that Illusions Delusions operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Creating value in data economy
– The success of analytics program of Illusions Delusions has opened avenues for new revenue streams for the organization in the industry. This can help Illusions Delusions to build a more holistic ecosystem as suggested in the Necessary Illusions and Dangerous Delusions case study. Illusions Delusions can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Illusions Delusions 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.
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. Illusions Delusions can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Illusions Delusions 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
– Illusions Delusions 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.
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 Illusions Delusions in the consumer business. Now Illusions Delusions can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Illusions Delusions can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Illusions Delusions can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Necessary Illusions and Dangerous Delusions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Necessary Illusions and Dangerous Delusions are -
High dependence on third party suppliers
– Illusions Delusions 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.
Shortening product life cycle
– it is one of the major threat that Illusions Delusions is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Illusions Delusions business can come under increasing regulations regarding data privacy, data security, etc.
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 Illusions Delusions 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. Illusions Delusions can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Illusions Delusions 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 Necessary Illusions and Dangerous Delusions .
Technology acceleration in Forth Industrial Revolution
– Illusions Delusions has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Illusions Delusions 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 Necessary Illusions and Dangerous Delusions, Illusions Delusions 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 .
Regulatory challenges
– Illusions Delusions 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.
Increasing wage structure of Illusions Delusions
– 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 Illusions Delusions.
Stagnating economy with rate increase
– Illusions Delusions 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.
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.
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. Illusions Delusions needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Necessary Illusions and Dangerous Delusions 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 Necessary Illusions and Dangerous Delusions 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 Necessary Illusions and Dangerous Delusions 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 Necessary Illusions and Dangerous Delusions 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 Necessary Illusions and Dangerous Delusions 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 Illusions Delusions needs to make to build a sustainable competitive advantage.