Case Study Description of Skunk works: How Breaking Away Fuels Breakthroughs
At the world's most innovative companies, 'Skunk Works' has become the standard approach for running top secret projects with elite special teams. The hallmarks of a Skunk Works project include high-quality designs in a short time frame with limited resources. The author describes how it all started, at Lockheed Martin in the 1940s, and how the approach has evolved to inspire Apple and other modern innovators.
Swot Analysis of "Skunk works: How Breaking Away Fuels Breakthroughs" written by Matthew E May includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Skunk Hallmarks facing as an external strategic factors. Some of the topics covered in Skunk works: How Breaking Away Fuels Breakthroughs case study are - Strategic Management Strategies, Innovation, Leadership and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Skunk works: How Breaking Away Fuels Breakthroughs casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing household debt because of falling income levels,
technology disruption, increasing energy prices, etc
Introduction to SWOT Analysis of Skunk works: How Breaking Away Fuels Breakthroughs
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Skunk works: How Breaking Away Fuels Breakthroughs case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Skunk Hallmarks, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Skunk Hallmarks 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 Skunk works: How Breaking Away Fuels Breakthroughs can be done for the following purposes –
1. Strategic planning using facts provided in Skunk works: How Breaking Away Fuels Breakthroughs case study
2. Improving business portfolio management of Skunk Hallmarks
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 Skunk Hallmarks
Strengths Skunk works: How Breaking Away Fuels Breakthroughs | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Skunk Hallmarks in Skunk works: How Breaking Away Fuels Breakthroughs Harvard Business Review case study are -
High switching costs
– The high switching costs that Skunk Hallmarks 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Skunk Hallmarks digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Skunk Hallmarks 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.
Superior customer experience
– The customer experience strategy of Skunk Hallmarks in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Skunk Hallmarks 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 Skunk Hallmarks is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Skunk works: How Breaking Away Fuels Breakthroughs Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Innovation & Entrepreneurship field
– Skunk Hallmarks 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 Skunk Hallmarks in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Skunk Hallmarks 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 Matthew E May 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.
Training and development
– Skunk Hallmarks has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Skunk works: How Breaking Away Fuels Breakthroughs 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.
Operational resilience
– The operational resilience strategy in the Skunk works: How Breaking Away Fuels Breakthroughs 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.
Successful track record of launching new products
– Skunk Hallmarks has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Skunk Hallmarks 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.
Highly skilled collaborators
– Skunk Hallmarks 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 Skunk works: How Breaking Away Fuels Breakthroughs HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Skunk Hallmarks in the sector have low bargaining power. Skunk works: How Breaking Away Fuels Breakthroughs has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Skunk Hallmarks to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Skunk Hallmarks 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 Skunk works: How Breaking Away Fuels Breakthroughs - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Skunk works: How Breaking Away Fuels Breakthroughs | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Skunk works: How Breaking Away Fuels Breakthroughs are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Skunk works: How Breaking Away Fuels Breakthroughs, it seems that the employees of Skunk Hallmarks 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Skunk works: How Breaking Away Fuels Breakthroughs 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 Skunk Hallmarks has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Matthew E May suggests that, Skunk Hallmarks 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Skunk works: How Breaking Away Fuels Breakthroughs, is just above the industry average. Skunk Hallmarks 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Skunk Hallmarks is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Skunk works: How Breaking Away Fuels Breakthroughs can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Skunk Hallmarks 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.
Capital Spending Reduction
– Even during the low interest decade, Skunk Hallmarks 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.
Aligning sales with marketing
– It come across in the case study Skunk works: How Breaking Away Fuels Breakthroughs 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 Skunk works: How Breaking Away Fuels Breakthroughs can leverage the sales team experience to cultivate customer relationships as Skunk Hallmarks is planning to shift buying processes online.
Need for greater diversity
– Skunk Hallmarks 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.
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 Skunk Hallmarks supply chain. Even after few cautionary changes mentioned in the HBR case study - Skunk works: How Breaking Away Fuels Breakthroughs, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Skunk Hallmarks vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Skunk Hallmarks 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.
Opportunities Skunk works: How Breaking Away Fuels Breakthroughs | 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 Skunk works: How Breaking Away Fuels Breakthroughs are -
Using analytics as competitive advantage
– Skunk Hallmarks 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 Skunk works: How Breaking Away Fuels Breakthroughs - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Skunk Hallmarks to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Skunk Hallmarks is facing challenges because of the dominance of functional experts in the organization. Skunk works: How Breaking Away Fuels Breakthroughs 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.
Manufacturing automation
– Skunk Hallmarks 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.
Developing new processes and practices
– Skunk Hallmarks 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.
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. Skunk Hallmarks can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Skunk Hallmarks 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, Skunk works: How Breaking Away Fuels Breakthroughs, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Skunk Hallmarks 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Skunk Hallmarks to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Skunk Hallmarks 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 Skunk Hallmarks 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. Skunk Hallmarks 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. Skunk Hallmarks 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.
Leveraging digital technologies
– Skunk Hallmarks 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.
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. Skunk Hallmarks can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Skunk Hallmarks to increase its market reach. Skunk Hallmarks 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.
Threats Skunk works: How Breaking Away Fuels Breakthroughs External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Skunk works: How Breaking Away Fuels Breakthroughs are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Skunk Hallmarks 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 Skunk works: How Breaking Away Fuels Breakthroughs .
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. Skunk Hallmarks 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.
Shortening product life cycle
– it is one of the major threat that Skunk Hallmarks is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Skunk Hallmarks 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.
Regulatory challenges
– Skunk Hallmarks 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.
High dependence on third party suppliers
– Skunk Hallmarks 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.
Increasing wage structure of Skunk Hallmarks
– 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 Skunk Hallmarks.
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 Skunk Hallmarks.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Skunk Hallmarks with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Skunk Hallmarks business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Skunk Hallmarks 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.
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. Skunk Hallmarks needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Skunk works: How Breaking Away Fuels Breakthroughs 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 Skunk works: How Breaking Away Fuels Breakthroughs 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 Skunk works: How Breaking Away Fuels Breakthroughs 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 Skunk works: How Breaking Away Fuels Breakthroughs 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 Skunk works: How Breaking Away Fuels Breakthroughs 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 Skunk Hallmarks needs to make to build a sustainable competitive advantage.