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 - – there is increasing trade war between United States & China, increasing energy prices, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, cloud computing is disrupting traditional business models,
there is backlash against globalization, central banks are concerned over increasing inflation, 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 -
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Skunk works: How Breaking Away Fuels Breakthroughs firm has clearly differentiated products in the market place. This has enabled Skunk Hallmarks to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Skunk Hallmarks to invest into research and development (R&D) and innovation.
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.
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.
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.
Organizational Resilience of Skunk Hallmarks
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Skunk Hallmarks does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
Innovation driven organization
– Skunk Hallmarks is one of the most innovative firm in sector. Manager in Skunk works: How Breaking Away Fuels Breakthroughs Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Skunk Hallmarks 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.
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.
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 -
Slow decision making process
– As mentioned earlier in the report, Skunk Hallmarks 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. Skunk Hallmarks 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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Skunk Hallmarks needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
No frontier risks strategy
– After analyzing the HBR case study Skunk works: How Breaking Away Fuels Breakthroughs, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Skunk works: How Breaking Away Fuels Breakthroughs 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 Skunk Hallmarks 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Skunk Hallmarks 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.
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.
Slow to strategic competitive environment developments
– As Skunk works: How Breaking Away Fuels Breakthroughs HBR case study mentions - Skunk Hallmarks 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Skunk works: How Breaking Away Fuels Breakthroughs, in the dynamic environment Skunk Hallmarks has struggled to respond to the nimble upstart competition. Skunk Hallmarks has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Skunk Hallmarks can use these opportunities to build new business models that can help the communities that Skunk Hallmarks operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Buying journey improvements
– Skunk Hallmarks can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Skunk works: How Breaking Away Fuels Breakthroughs 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 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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Skunk Hallmarks 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 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.
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.
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.
Building a culture of innovation
– managers at Skunk Hallmarks 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.
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.
Loyalty marketing
– Skunk Hallmarks 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.
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.
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 -
Environmental challenges
– Skunk Hallmarks 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. Skunk Hallmarks can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
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.
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.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Skunk Hallmarks 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.
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 Skunk Hallmarks 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 Skunk works: How Breaking Away Fuels Breakthroughs, Skunk Hallmarks 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 .
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.
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.
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.
