Case Study Description of Teradyne: Corporate Management of Disruptive Change
Two cases deal with the introduction of a new product to Teradyne's line of semiconductor test equipment. This case deals with the problems facing the head of a start-up division responsible for developing and bringing to market a new product based on technology deemed very important to the future but unattractive to present customers and, therefore, the operating divisions. This case deals with the same set of problems from the perspective of corporate management--in particular why the skunk works approach was necessary and what new problems this approach creates even if the project is successful.
Swot Analysis of "Teradyne: Corporate Management of Disruptive Change" written by Joseph L. Bower includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Deals Teradyne's facing as an external strategic factors. Some of the topics covered in Teradyne: Corporate Management of Disruptive Change case study are - Strategic Management Strategies, Disruptive innovation, Entrepreneurship, Marketing, Product development, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Teradyne: Corporate Management of Disruptive Change casestudy better are - – there is backlash against globalization, increasing commodity prices, increasing transportation and logistics costs, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Teradyne: Corporate Management of Disruptive Change
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Teradyne: Corporate Management of Disruptive Change case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Deals Teradyne's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Deals Teradyne's 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 Teradyne: Corporate Management of Disruptive Change can be done for the following purposes –
1. Strategic planning using facts provided in Teradyne: Corporate Management of Disruptive Change case study
2. Improving business portfolio management of Deals Teradyne's
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Deals Teradyne's
Strengths Teradyne: Corporate Management of Disruptive Change | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Deals Teradyne's in Teradyne: Corporate Management of Disruptive Change Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Deals Teradyne's 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 Deals Teradyne's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Deals Teradyne's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Deals Teradyne's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Deals Teradyne's is one of the leading recruiters in the industry. Managers in the Teradyne: Corporate Management of Disruptive Change are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Deals Teradyne's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Teradyne: Corporate Management of Disruptive Change 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 Teradyne: Corporate Management of Disruptive Change 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.
Low bargaining power of suppliers
– Suppliers of Deals Teradyne's in the sector have low bargaining power. Teradyne: Corporate Management of Disruptive Change has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Deals Teradyne's to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Deals Teradyne's 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 Teradyne: Corporate Management of Disruptive Change HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Deals Teradyne's 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.
Innovation driven organization
– Deals Teradyne's is one of the most innovative firm in sector. Manager in Teradyne: Corporate Management of Disruptive Change Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Deals Teradyne's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Deals Teradyne's 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.
Successful track record of launching new products
– Deals Teradyne's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Deals Teradyne's 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
– Deals Teradyne's 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 Teradyne: Corporate Management of Disruptive Change | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Teradyne: Corporate Management of Disruptive Change are -
Workers concerns about automation
– As automation is fast increasing in the segment, Deals Teradyne's 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.
Lack of clear differentiation of Deals Teradyne's products
– To increase the profitability and margins on the products, Deals Teradyne's needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Deals Teradyne's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Teradyne: Corporate Management of Disruptive Change, in the dynamic environment Deals Teradyne's has struggled to respond to the nimble upstart competition. Deals Teradyne's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Deals Teradyne's 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. Deals Teradyne's 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 star products
– The top 2 products and services of the firm as mentioned in the Teradyne: Corporate Management of Disruptive Change 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 Deals Teradyne's has relatively successful track record of launching new products.
Products dominated business model
– Even though Deals Teradyne's 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 - Teradyne: Corporate Management of Disruptive Change should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Deals Teradyne's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Deals Teradyne's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Deals Teradyne's to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Deals Teradyne's 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.
No frontier risks strategy
– After analyzing the HBR case study Teradyne: Corporate Management of Disruptive Change, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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 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 Deals Teradyne's supply chain. Even after few cautionary changes mentioned in the HBR case study - Teradyne: Corporate Management of Disruptive Change, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Deals Teradyne's vulnerable to further global disruptions in South East Asia.
Opportunities Teradyne: Corporate Management of Disruptive Change | 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 Teradyne: Corporate Management of Disruptive Change are -
Manufacturing automation
– Deals Teradyne's can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Deals Teradyne's 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 Deals Teradyne's to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Deals Teradyne's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Teradyne: Corporate Management of Disruptive Change 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.
Loyalty marketing
– Deals Teradyne's 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.
Learning at scale
– Online learning technologies has now opened space for Deals Teradyne's 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Deals Teradyne's 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, Deals Teradyne's 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, Teradyne: Corporate Management of Disruptive Change, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Deals Teradyne's in the consumer business. Now Deals Teradyne's can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Deals Teradyne's 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. Deals Teradyne's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Deals Teradyne's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Deals Teradyne's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Deals Teradyne's to increase its market reach. Deals Teradyne's 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, Deals Teradyne's can use these opportunities to build new business models that can help the communities that Deals Teradyne's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Teradyne: Corporate Management of Disruptive Change External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Teradyne: Corporate Management of Disruptive Change are -
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Deals Teradyne's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Deals Teradyne's 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 Leadership & Managing People industry regulations.
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 wage structure of Deals Teradyne's
– 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 Deals Teradyne's.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Deals Teradyne's 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
– Deals Teradyne's 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
– Deals Teradyne's 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. Deals Teradyne's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Deals Teradyne's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Teradyne: Corporate Management of Disruptive Change, Deals Teradyne's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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. Deals Teradyne's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Deals Teradyne's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Deals Teradyne's needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
Shortening product life cycle
– it is one of the major threat that Deals Teradyne's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Teradyne: Corporate Management of Disruptive Change 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 Teradyne: Corporate Management of Disruptive Change 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 Teradyne: Corporate Management of Disruptive Change 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 Teradyne: Corporate Management of Disruptive Change 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 Teradyne: Corporate Management of Disruptive Change 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 Deals Teradyne's needs to make to build a sustainable competitive advantage.
