This case describes the sourcing policy for a consumer electronics company. The company must decide how to structure contracts with their supplier - using a purchase contract, an option contract, or combination of the two. The company can also buy from the spot market. The students use a spreadsheet model with Monte Carlo simulation to analyze the contracting options.
Swot Analysis of "Konys, Inc." written by Deishin Lee, Tunay I Tunca includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Konys Contract facing as an external strategic factors. Some of the topics covered in Konys, Inc. case study are - Strategic Management Strategies, Negotiations, Product development, Risk management, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Konys, Inc. casestudy better are - – increasing transportation and logistics costs, technology disruption, wage bills are increasing, increasing commodity prices, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing energy prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Konys, Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Konys Contract, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Konys Contract 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 Konys, Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Konys, Inc. case study
2. Improving business portfolio management of Konys Contract
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 Konys Contract
Strengths Konys, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Konys Contract in Konys, Inc. Harvard Business Review case study are -
Effective Research and Development (R&D)
– Konys Contract 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 Konys, Inc. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Konys Contract is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Konys Contract has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Konys Contract to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Konys Contract in the sector have low bargaining power. Konys, Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Konys Contract to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Konys Contract is one of the leading recruiters in the industry. Managers in the Konys, Inc. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Konys Contract 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 Konys, Inc. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Konys Contract digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Konys Contract 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.
Cross disciplinary teams
– Horizontal connected teams at the Konys Contract 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.
Learning organization
- Konys Contract 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 Konys Contract is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Konys, Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Leadership & Managing People industry
– Konys, Inc. firm has clearly differentiated products in the market place. This has enabled Konys Contract to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Konys Contract to invest into research and development (R&D) and innovation.
Training and development
– Konys Contract has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Konys, Inc. 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.
Diverse revenue streams
– Konys Contract is present in almost all the verticals within the industry. This has provided firm in Konys, Inc. 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.
Weaknesses Konys, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Konys, Inc. are -
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 Konys Contract supply chain. Even after few cautionary changes mentioned in the HBR case study - Konys, Inc., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Konys Contract vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Konys Contract is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Konys Contract needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Konys Contract to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Konys Contract 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Konys, Inc. 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 Konys Contract has relatively successful track record of launching new products.
Products dominated business model
– Even though Konys Contract 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 - Konys, Inc. should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Konys, Inc. 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 Konys, Inc. can leverage the sales team experience to cultivate customer relationships as Konys Contract is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Konys Contract 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. Konys Contract 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 cash cycle compare to competitors
Konys Contract 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Konys Contract 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.
Slow to strategic competitive environment developments
– As Konys, Inc. HBR case study mentions - Konys Contract 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Konys Contract is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Konys, Inc. 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 Konys, Inc. | 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 Konys, Inc. are -
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. Konys Contract 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. Konys Contract can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Konys Contract can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Konys Contract can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Konys, Inc. 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.
Learning at scale
– Online learning technologies has now opened space for Konys Contract 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Konys Contract can use these opportunities to build new business models that can help the communities that Konys Contract operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Building a culture of innovation
– managers at Konys Contract 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Konys Contract 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, Konys, Inc., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Konys Contract 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, Konys Contract is facing challenges because of the dominance of functional experts in the organization. Konys, Inc. 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.
Developing new processes and practices
– Konys Contract 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.
Manufacturing automation
– Konys Contract 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.
Better consumer reach
– The expansion of the 5G network will help Konys Contract to increase its market reach. Konys Contract 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.
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 Konys Contract 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.
Threats Konys, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Konys, Inc. are -
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 Konys Contract in the Leadership & Managing People sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Konys Contract 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.
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.
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. Konys Contract 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
– Konys Contract 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.
Technology acceleration in Forth Industrial Revolution
– Konys Contract has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Konys Contract 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.
Environmental challenges
– Konys Contract 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. Konys Contract can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Konys Contract is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Konys Contract needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Konys Contract with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Konys Contract 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.
Stagnating economy with rate increase
– Konys Contract 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 Konys Contract.
Weighted SWOT Analysis of Konys, Inc. 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 Konys, Inc. 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 Konys, Inc. 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 Konys, Inc. 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 Konys, Inc. 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 Konys Contract needs to make to build a sustainable competitive advantage.