Case Study Description of Knowledge Management: Philosophy, Processes, and Pitfalls
Based on a survey of 317 firms and in-depth cases on 6 firms, this article examines the management of the most intangible asset of the firm--its knowledge. This article examines the sources, uses, and outcomes of knowledge and shows how successful firms acquire and absorb more information and know-how. More importantly, these firms have more effective decision-making processes that enable them both to create new knowledge and to apply this knowledge to generating more innovation in products and processes. Greater levels of innovation, in turn, lead to improved market and financial performance. This article identifies eight key lessons for knowledge managers and demonstrates how rather than attempting to manage knowledge, firms should measure the change in the innovative outputs that arise from their knowledge management strategies and practices.
Authors :: Christine Soo, Timothy M. Devinney, David F. Midgley, Anne Deering
Swot Analysis of "Knowledge Management: Philosophy, Processes, and Pitfalls" written by Christine Soo, Timothy M. Devinney, David F. Midgley, Anne Deering includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Knowledge Firms facing as an external strategic factors. Some of the topics covered in Knowledge Management: Philosophy, Processes, and Pitfalls case study are - Strategic Management Strategies, Innovation, Knowledge management, Managing people and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Knowledge Management: Philosophy, Processes, and Pitfalls casestudy better are - – supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, geopolitical disruptions, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Knowledge Management: Philosophy, Processes, and Pitfalls
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Knowledge Management: Philosophy, Processes, and Pitfalls case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Knowledge Firms, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Knowledge Firms 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 Knowledge Management: Philosophy, Processes, and Pitfalls can be done for the following purposes –
1. Strategic planning using facts provided in Knowledge Management: Philosophy, Processes, and Pitfalls case study
2. Improving business portfolio management of Knowledge Firms
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 Knowledge Firms
Strengths Knowledge Management: Philosophy, Processes, and Pitfalls | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Knowledge Firms in Knowledge Management: Philosophy, Processes, and Pitfalls Harvard Business Review case study are -
Learning organization
- Knowledge Firms 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 Knowledge Firms is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Knowledge Management: Philosophy, Processes, and Pitfalls Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Knowledge Firms 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.
Strong track record of project management
– Knowledge Firms is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Knowledge Management: Philosophy, Processes, and Pitfalls firm has clearly differentiated products in the market place. This has enabled Knowledge Firms to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Knowledge Firms to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Knowledge Firms 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 Knowledge Management: Philosophy, Processes, and Pitfalls - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Knowledge Firms is present in almost all the verticals within the industry. This has provided firm in Knowledge Management: Philosophy, Processes, and Pitfalls 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.
Operational resilience
– The operational resilience strategy in the Knowledge Management: Philosophy, Processes, and Pitfalls 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.
Analytics focus
– Knowledge Firms 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 Christine Soo, Timothy M. Devinney, David F. Midgley, Anne Deering 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.
High switching costs
– The high switching costs that Knowledge Firms 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.
Ability to lead change in Innovation & Entrepreneurship field
– Knowledge Firms 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 Knowledge Firms in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Knowledge Firms in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Knowledge Firms has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Knowledge Firms 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.
Weaknesses Knowledge Management: Philosophy, Processes, and Pitfalls | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Knowledge Management: Philosophy, Processes, and Pitfalls are -
Increasing silos among functional specialists
– The organizational structure of Knowledge Firms is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Knowledge Firms needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Knowledge Firms to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Knowledge Firms products
– To increase the profitability and margins on the products, Knowledge Firms needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Knowledge Management: Philosophy, Processes, and Pitfalls, in the dynamic environment Knowledge Firms has struggled to respond to the nimble upstart competition. Knowledge Firms has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Knowledge Management: Philosophy, Processes, and Pitfalls 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 Knowledge Management: Philosophy, Processes, and Pitfalls can leverage the sales team experience to cultivate customer relationships as Knowledge Firms is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Knowledge Management: Philosophy, Processes, and Pitfalls, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Knowledge Firms 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.
Capital Spending Reduction
– Even during the low interest decade, Knowledge Firms 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Christine Soo, Timothy M. Devinney, David F. Midgley, Anne Deering suggests that, Knowledge Firms 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 cash cycle compare to competitors
Knowledge Firms 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.
Products dominated business model
– Even though Knowledge Firms has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Knowledge Management: Philosophy, Processes, and Pitfalls should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Knowledge Management: Philosophy, Processes, and Pitfalls 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 Knowledge Firms 's lucrative customers.
Opportunities Knowledge Management: Philosophy, Processes, and Pitfalls | 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 Knowledge Management: Philosophy, Processes, and Pitfalls are -
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 Knowledge Firms in the consumer business. Now Knowledge Firms can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Knowledge Firms 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
– Knowledge Firms 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 Knowledge Management: Philosophy, Processes, and Pitfalls - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Knowledge Firms to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Knowledge Firms 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Knowledge Firms can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Knowledge Firms 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.
Creating value in data economy
– The success of analytics program of Knowledge Firms has opened avenues for new revenue streams for the organization in the industry. This can help Knowledge Firms to build a more holistic ecosystem as suggested in the Knowledge Management: Philosophy, Processes, and Pitfalls case study. Knowledge Firms can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Knowledge Firms 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. Knowledge Firms 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.
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. Knowledge Firms can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Knowledge Firms 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.
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 Knowledge Firms 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Knowledge Firms 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, Knowledge Management: Philosophy, Processes, and Pitfalls, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Knowledge Firms is facing challenges because of the dominance of functional experts in the organization. Knowledge Management: Philosophy, Processes, and Pitfalls 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.
Threats Knowledge Management: Philosophy, Processes, and Pitfalls External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Knowledge Management: Philosophy, Processes, and Pitfalls are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Knowledge Firms 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
– Knowledge Firms 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.
Environmental challenges
– Knowledge Firms 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. Knowledge Firms can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Knowledge Management: Philosophy, Processes, and Pitfalls, Knowledge Firms 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 .
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 Knowledge Firms.
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. Knowledge Firms can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Knowledge Firms 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 Knowledge Management: Philosophy, Processes, and Pitfalls .
Increasing wage structure of Knowledge Firms
– 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 Knowledge Firms.
Regulatory challenges
– Knowledge Firms 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Knowledge Firms 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.
Consumer confidence and its impact on Knowledge Firms 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.
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 Knowledge Firms business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Knowledge Management: Philosophy, Processes, and Pitfalls 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 Knowledge Management: Philosophy, Processes, and Pitfalls 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 Knowledge Management: Philosophy, Processes, and Pitfalls 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 Knowledge Management: Philosophy, Processes, and Pitfalls 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 Knowledge Management: Philosophy, Processes, and Pitfalls 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 Knowledge Firms needs to make to build a sustainable competitive advantage.
