Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision
Compaq Computer Corp., like many manufacturers, faces operational choices that strongly influence the cost of capital engaged in inventory, customer response time, and potential product obsolescence. This case describes some key operations strategy choices regarding two types of inventory: operation inventory (e.g., flow) and tactical inventory (e.g., finished goods). Tradeoffs in inventory management and customer response time are explored in the context of a firm that is changing from a push manufacturing to a customer-oriented pull system. Optional computer simulations (B case) visually display the dynamics of push and pull systems, kanban squares, and their effect on inventory requirements and customer response times. The simulations require the ProModel simulation software tool (not included, to be purchased separately) and computer simulation model files (available from the authors' website: http://faculty.insead.edu/stephen-chick/simulations).
Swot Analysis of "Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision" written by Michael T. Pich, Ludo Van Der Heyden includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Inventory Simulations facing as an external strategic factors. Some of the topics covered in Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision case study are - Strategic Management Strategies, IT, Operations management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision casestudy better are - – increasing commodity prices, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, there is backlash against globalization, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
challanges to central banks by blockchain based private currencies, technology disruption, etc
Introduction to SWOT Analysis of Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Inventory Simulations, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Inventory Simulations 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision can be done for the following purposes –
1. Strategic planning using facts provided in Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision case study
2. Improving business portfolio management of Inventory Simulations
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 Inventory Simulations
Strengths Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Inventory Simulations in Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision Harvard Business Review case study are -
High switching costs
– The high switching costs that Inventory Simulations 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.
Effective Research and Development (R&D)
– Inventory Simulations 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Inventory Simulations 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Leadership & Managing People industry
– Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision firm has clearly differentiated products in the market place. This has enabled Inventory Simulations to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Inventory Simulations to invest into research and development (R&D) and innovation.
Analytics focus
– Inventory Simulations 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 Michael T. Pich, Ludo Van Der Heyden 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.
Training and development
– Inventory Simulations has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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.
Ability to lead change in Leadership & Managing People field
– Inventory Simulations 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 Inventory Simulations in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Inventory Simulations has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Inventory Simulations to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Inventory Simulations
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Inventory Simulations does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Inventory Simulations is present in almost all the verticals within the industry. This has provided firm in Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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.
Superior customer experience
– The customer experience strategy of Inventory Simulations in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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.
Weaknesses Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision, is just above the industry average. Inventory Simulations 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.
Products dominated business model
– Even though Inventory Simulations 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 - Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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 Inventory Simulations has relatively successful track record of launching new products.
High cash cycle compare to competitors
Inventory Simulations 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision, it seems that the employees of Inventory Simulations don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision HBR case study mentions - Inventory Simulations 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.
Capital Spending Reduction
– Even during the low interest decade, Inventory Simulations 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.
Lack of clear differentiation of Inventory Simulations products
– To increase the profitability and margins on the products, Inventory Simulations needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Inventory Simulations is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Inventory Simulations needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Inventory Simulations to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Inventory Simulations is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision | 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision are -
Better consumer reach
– The expansion of the 5G network will help Inventory Simulations to increase its market reach. Inventory Simulations 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Inventory Simulations 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, Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Inventory Simulations 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.
Loyalty marketing
– Inventory Simulations 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.
Buying journey improvements
– Inventory Simulations can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Inventory Simulations 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 Inventory Simulations to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Inventory Simulations 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Inventory Simulations can use these opportunities to build new business models that can help the communities that Inventory Simulations operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Inventory Simulations is facing challenges because of the dominance of functional experts in the organization. Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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.
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. Inventory Simulations can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Inventory Simulations 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.
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 Inventory Simulations in the consumer business. Now Inventory Simulations can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Inventory Simulations 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Inventory Simulations to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision are -
Stagnating economy with rate increase
– Inventory Simulations 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.
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 Inventory Simulations.
Increasing wage structure of Inventory Simulations
– 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 Inventory Simulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Inventory Simulations with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Inventory Simulations needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Inventory Simulations in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Regulatory challenges
– Inventory Simulations 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.
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 Inventory Simulations business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Inventory Simulations 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. Inventory Simulations can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Inventory Simulations can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Inventory Simulations has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Inventory Simulations 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Inventory Simulations 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision .
Weighted SWOT Analysis of Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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 Process Control at Compaq Computer Corp. (A): Understanding the Build-to-Order Decision 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 Inventory Simulations needs to make to build a sustainable competitive advantage.
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