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 - – increasing energy prices, technology disruption, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, 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 -
Organizational Resilience of Deals Teradyne's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Deals Teradyne's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Learning organization
- Deals Teradyne's 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 Deals Teradyne's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Teradyne: Corporate Management of Disruptive Change Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Effective Research and Development (R&D)
– Deals Teradyne's 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 Teradyne: Corporate Management of Disruptive Change - 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
– Deals Teradyne's is present in almost all the verticals within the industry. This has provided firm in Teradyne: Corporate Management of Disruptive Change 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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Deals Teradyne's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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 -
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 operating costs
– Compare to the competitors, firm in the HBR case study Teradyne: Corporate Management of Disruptive Change 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 Deals Teradyne's 's lucrative customers.
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.
Low market penetration in new markets
– Outside its home market of Deals Teradyne's, firm in the HBR case study Teradyne: Corporate Management of Disruptive Change needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Deals Teradyne's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Teradyne: Corporate Management of Disruptive Change 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 bargaining power of channel partners
– Because of the regulatory requirements, Joseph L. Bower suggests that, Deals Teradyne's 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.
Interest costs
– Compare to the competition, Deals Teradyne's 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.
Slow to strategic competitive environment developments
– As Teradyne: Corporate Management of Disruptive Change HBR case study mentions - Deals Teradyne's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Teradyne: Corporate Management of Disruptive Change, it seems that the employees of Deals Teradyne's 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.
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.
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 -
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.
Creating value in data economy
– The success of analytics program of Deals Teradyne's has opened avenues for new revenue streams for the organization in the industry. This can help Deals Teradyne's to build a more holistic ecosystem as suggested in the Teradyne: Corporate Management of Disruptive Change case study. Deals Teradyne's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Deals Teradyne's 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 Leadership & Managing People segment.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Deals Teradyne's is facing challenges because of the dominance of functional experts in the organization. Teradyne: Corporate Management of Disruptive Change 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.
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 Deals Teradyne's 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 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.
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.
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. Deals Teradyne's 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 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.
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.
Developing new processes and practices
– Deals Teradyne's can develop new processes and procedures in Leadership & Managing People 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 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 -
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.
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.
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 Deals Teradyne's.
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.
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 .
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.
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.
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.
High dependence on third party suppliers
– Deals Teradyne's 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.
Consumer confidence and its impact on Deals Teradyne's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Deals Teradyne's 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 Teradyne: Corporate Management of Disruptive Change .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Deals Teradyne's in the Leadership & Managing People industry. The Leadership & Managing People 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.
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.
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.