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 - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing household debt because of falling income levels, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, 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 -
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.
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.
High brand equity
– Lean Daktronics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lean Daktronics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
Ability to recruit top talent
– Lean Daktronics is one of the leading recruiters in the industry. Managers in the Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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.
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.
Learning organization
- Lean Daktronics 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 Lean Daktronics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Lean Daktronics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lean Daktronics 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.
Ability to lead change in Leadership & Managing People field
– Lean Daktronics 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 Lean Daktronics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
High cash cycle compare to competitors
Lean Daktronics 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.
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.
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.
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.
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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc., in the dynamic environment Lean Daktronics has struggled to respond to the nimble upstart competition. Lean Daktronics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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 -
Buying journey improvements
– Lean Daktronics can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Daktronics (D): Keen on Lean Manufacturing at Daktronics, 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.
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.
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.
Manufacturing automation
– Lean Daktronics 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.
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.
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.
Loyalty marketing
– Lean Daktronics 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.
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. Lean Daktronics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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. Lean Daktronics 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. Lean Daktronics 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.
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.
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.
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.
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 -
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. Lean Daktronics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Lean Daktronics is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– 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.
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.
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. .
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.
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.
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. Lean Daktronics needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 .
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.
Increasing wage structure of Lean Daktronics
– 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 Lean Daktronics.
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.
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 Lean Daktronics in the Leadership & Managing People sector and impact the bottomline 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.
