Case Study Description of FotoNation: Leveraging International Knowledge Connectivity
In 2014, FotoNation, an international venture previously located in Ireland, produced innovative solutions for digital photography from its headquarters in California. At the core of FotoNation's technology were its proprietary algorithms, which were embedded in software and used in over 2 billion digital devices such as the cameras in smartphones. The company placed an emphasis on research, and it had its research and development units in Romania, Ireland, and the Western United States. However, after being acquired by Tessera Technologies in 2008, FotoNation had to relocate its top management team from Ireland to the headquarters of Tessera Technologies in the United States. FotoNation's management had some difficult decisions to make in light of the acquisition. How would a research-based product fit into the grand scheme of Tessera Technologies? How would FotoNation compete with larger industrial players, while coping with the relocation of its top-tier staff? Jung Kwan Kim is affiliated with Temple University. Ahreum Lee is affiliated with Fox School of Business. SinA?ad Monaghan is affiliated with Rutgers Business School. Ram Mudambi is affiliated with Temple University.
Swot Analysis of "FotoNation: Leveraging International Knowledge Connectivity" written by Jung Kwan Kim, Ahreum Lee, Sinead Monaghan, Ram Mudambi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fotonation Tessera facing as an external strategic factors. Some of the topics covered in FotoNation: Leveraging International Knowledge Connectivity case study are - Strategic Management Strategies, International business, Knowledge management, Mergers & acquisitions, Mobile, Research & development and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the FotoNation: Leveraging International Knowledge Connectivity casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of FotoNation: Leveraging International Knowledge Connectivity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in FotoNation: Leveraging International Knowledge Connectivity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fotonation Tessera, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fotonation Tessera 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 FotoNation: Leveraging International Knowledge Connectivity can be done for the following purposes –
1. Strategic planning using facts provided in FotoNation: Leveraging International Knowledge Connectivity case study
2. Improving business portfolio management of Fotonation Tessera
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 Fotonation Tessera
Strengths FotoNation: Leveraging International Knowledge Connectivity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fotonation Tessera in FotoNation: Leveraging International Knowledge Connectivity Harvard Business Review case study are -
Effective Research and Development (R&D)
– Fotonation Tessera 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 FotoNation: Leveraging International Knowledge Connectivity - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the FotoNation: Leveraging International Knowledge Connectivity 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.
Ability to lead change in Leadership & Managing People field
– Fotonation Tessera 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 Fotonation Tessera in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Fotonation Tessera
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fotonation Tessera does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Fotonation Tessera has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fotonation Tessera to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Fotonation Tessera is one of the leading recruiters in the industry. Managers in the FotoNation: Leveraging International Knowledge Connectivity 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 Fotonation Tessera in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Fotonation Tessera 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.
Innovation driven organization
– Fotonation Tessera is one of the most innovative firm in sector. Manager in FotoNation: Leveraging International Knowledge Connectivity Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Fotonation Tessera has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fotonation Tessera 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.
High switching costs
– The high switching costs that Fotonation Tessera 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.
Learning organization
- Fotonation Tessera 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 Fotonation Tessera is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in FotoNation: Leveraging International Knowledge Connectivity Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses FotoNation: Leveraging International Knowledge Connectivity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FotoNation: Leveraging International Knowledge Connectivity are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fotonation Tessera is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study FotoNation: Leveraging International Knowledge Connectivity can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study FotoNation: Leveraging International Knowledge Connectivity 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 FotoNation: Leveraging International Knowledge Connectivity can leverage the sales team experience to cultivate customer relationships as Fotonation Tessera is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study FotoNation: Leveraging International Knowledge Connectivity, in the dynamic environment Fotonation Tessera has struggled to respond to the nimble upstart competition. Fotonation Tessera has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Fotonation Tessera is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Fotonation Tessera needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fotonation Tessera to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Fotonation Tessera 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. Fotonation Tessera 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 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 Fotonation Tessera supply chain. Even after few cautionary changes mentioned in the HBR case study - FotoNation: Leveraging International Knowledge Connectivity, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fotonation Tessera vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As FotoNation: Leveraging International Knowledge Connectivity HBR case study mentions - Fotonation Tessera 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study FotoNation: Leveraging International Knowledge Connectivity, is just above the industry average. Fotonation Tessera needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Low market penetration in new markets
– Outside its home market of Fotonation Tessera, firm in the HBR case study FotoNation: Leveraging International Knowledge Connectivity needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Jung Kwan Kim, Ahreum Lee, Sinead Monaghan, Ram Mudambi suggests that, Fotonation Tessera 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, Fotonation Tessera has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities FotoNation: Leveraging International Knowledge Connectivity | 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 FotoNation: Leveraging International Knowledge Connectivity are -
Building a culture of innovation
– managers at Fotonation Tessera 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fotonation Tessera 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 Fotonation Tessera to hire the very best people irrespective of their geographical location.
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. Fotonation Tessera can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Fotonation Tessera can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Fotonation Tessera to increase its market reach. Fotonation Tessera 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fotonation Tessera can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Fotonation Tessera has opened avenues for new revenue streams for the organization in the industry. This can help Fotonation Tessera to build a more holistic ecosystem as suggested in the FotoNation: Leveraging International Knowledge Connectivity case study. Fotonation Tessera can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fotonation Tessera 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fotonation Tessera is facing challenges because of the dominance of functional experts in the organization. FotoNation: Leveraging International Knowledge Connectivity 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.
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 Fotonation Tessera in the consumer business. Now Fotonation Tessera 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. Fotonation Tessera 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. Fotonation Tessera 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.
Learning at scale
– Online learning technologies has now opened space for Fotonation Tessera 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.
Loyalty marketing
– Fotonation Tessera 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.
Threats FotoNation: Leveraging International Knowledge Connectivity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study FotoNation: Leveraging International Knowledge Connectivity are -
Consumer confidence and its impact on Fotonation Tessera 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 Fotonation Tessera business can come under increasing regulations regarding data privacy, data security, etc.
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 Fotonation Tessera.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fotonation Tessera 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.
High dependence on third party suppliers
– Fotonation Tessera 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.
Regulatory challenges
– Fotonation Tessera 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.
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. Fotonation Tessera can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fotonation Tessera 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 FotoNation: Leveraging International Knowledge Connectivity .
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study FotoNation: Leveraging International Knowledge Connectivity, Fotonation Tessera 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 .
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. Fotonation Tessera 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.
Stagnating economy with rate increase
– Fotonation Tessera 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.
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 Fotonation Tessera in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of FotoNation: Leveraging International Knowledge Connectivity 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 FotoNation: Leveraging International Knowledge Connectivity 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 FotoNation: Leveraging International Knowledge Connectivity 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 FotoNation: Leveraging International Knowledge Connectivity 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 FotoNation: Leveraging International Knowledge Connectivity 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 Fotonation Tessera needs to make to build a sustainable competitive advantage.
