Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc.
For over forty years, Daktronics, Inc. had been one of the world's leading suppliers of electronic scoreboards, large electronic display systems, digital messaging solutions, software and services for sports venues, commercial and transportation applications. After decades of producing its products using a batch system, the multi-million dollar company made a formal decision to pursue lean manufacturing in February, 2006. The lean initiative took on even greater importance due to sluggishness in the U.S. economy and slowed sales in 2009. Now in 2010, four years after the lean project's initial launch, readers are asked, how successful has the lean conversion been, including the transition from a batch system to a high mix, flow line system? Is the firm poised and ready to extend its lean initiative to nonmanufacturing areas? By using clues within the case and detailed exhibits, the case provides a rich opportunity for readers to trace and evaluate an original equipment manufacturer's (OEM) lean journey. Ultimately, they should be able to answer questions, such as: What kinds of things did Daktronics appear to do correctly? What kinds of things could Daktronics have done differently... or better? What recommendations might follow from their experience for other OEMs that seek to implement lean manufacturing? What are the pros and cons of implementing lean techniques in nonmanufacturing areas?
Swot Analysis of "Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc." written by Nancy M. Levenburg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lean Daktronics facing as an external strategic factors. Some of the topics covered in Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. case study are - Strategic Management Strategies, Manufacturing, Product development and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies,
digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lean Daktronics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lean Daktronics 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. case study
2. Improving business portfolio management of Lean Daktronics
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 Lean Daktronics
Strengths Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lean Daktronics in Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. firm has clearly differentiated products in the market place. This has enabled Lean Daktronics to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Lean Daktronics to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Lean Daktronics 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.
Superior customer experience
– The customer experience strategy of Lean Daktronics in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Lean Daktronics is present in almost all the verticals within the industry. This has provided firm in Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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.
Operational resilience
– The operational resilience strategy in the Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. 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.
Innovation driven organization
– Lean Daktronics is one of the most innovative firm in sector. Manager in Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Lean Daktronics 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 Nancy M. Levenburg 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
– Lean Daktronics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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.
Low bargaining power of suppliers
– Suppliers of Lean Daktronics in the sector have low bargaining power. Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lean Daktronics to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Lean Daktronics 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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.
Organizational Resilience of Lean Daktronics
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lean Daktronics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Lean Daktronics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lean Daktronics 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.
Weaknesses Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. are -
Low market penetration in new markets
– Outside its home market of Lean Daktronics, firm in the HBR case study Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc., is just above the industry average. Lean Daktronics 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.
Slow decision making process
– As mentioned earlier in the report, Lean Daktronics 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. Lean Daktronics 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.
Products dominated business model
– Even though Lean Daktronics 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 - Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. can leverage the sales team experience to cultivate customer relationships as Lean Daktronics is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc., 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.
Interest costs
– Compare to the competition, Lean Daktronics 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. HBR case study mentions - Lean Daktronics 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, Lean Daktronics is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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.
Skills based hiring
– The stress on hiring functional specialists at Lean Daktronics has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Nancy M. Levenburg suggests that, Lean Daktronics 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.
Opportunities Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. are -
Better consumer reach
– The expansion of the 5G network will help Lean Daktronics to increase its market reach. Lean Daktronics 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lean Daktronics is facing challenges because of the dominance of functional experts in the organization. Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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.
Leveraging digital technologies
– Lean Daktronics can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Lean Daktronics 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lean Daktronics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Lean Daktronics 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.
Using analytics as competitive advantage
– Lean Daktronics 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lean Daktronics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lean Daktronics can use these opportunities to build new business models that can help the communities that Lean Daktronics operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Building a culture of innovation
– managers at Lean Daktronics 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.
Creating value in data economy
– The success of analytics program of Lean Daktronics has opened avenues for new revenue streams for the organization in the industry. This can help Lean Daktronics to build a more holistic ecosystem as suggested in the Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. case study. Lean Daktronics can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lean Daktronics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
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. Lean Daktronics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Lean Daktronics in the consumer business. Now Lean Daktronics can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. are -
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 Lean Daktronics.
High dependence on third party suppliers
– Lean Daktronics 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.
Environmental challenges
– Lean Daktronics 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. Lean Daktronics 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc., Lean Daktronics 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 .
Consumer confidence and its impact on Lean Daktronics 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lean Daktronics 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.
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 Lean Daktronics business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Lean Daktronics has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Lean Daktronics 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.
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. Lean Daktronics 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.
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.
Stagnating economy with rate increase
– Lean Daktronics 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lean Daktronics 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. .
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.
Weighted SWOT Analysis of Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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 Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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 Lean Daktronics needs to make to build a sustainable competitive advantage.