Harvard Case - Fujitsu: Co-Creating Digital Business
"Fujitsu: Co-Creating Digital Business" Harvard business case study is written by Sarah L.Y. Cheah, Maw Der Foo. It deals with the challenges in the field of Strategy. The case study is 12 page(s) long and it was first published on : Sep 13, 2018
At Fern Fort University, we recommend that Fujitsu pursue a multi-pronged strategy to solidify its position as a leading digital transformation partner. This involves leveraging its existing strengths in technology and analytics while actively embracing disruptive innovation and digital transformation within its own operations. This strategy will focus on:
- Co-creating digital business solutions with clients, emphasizing value creation and sustainable competitive advantage.
- Expanding into new markets and verticals through strategic alliances, mergers and acquisitions, and market development.
- Embracing a culture of innovation through leadership development, product development, and strategic foresight.
- Strengthening its brand through corporate social responsibility initiatives and strategic communication.
2. Background
Fujitsu, a Japanese multinational information technology company, is facing a challenging landscape. The rise of cloud computing, the increasing adoption of open-source software, and the emergence of new digital players are putting pressure on traditional IT providers. Fujitsu needs to adapt to this changing environment and find new ways to create value for its customers.
The case study focuses on Fujitsu's efforts to transform itself into a digital business partner. The company is exploring new business models, investing in emerging technologies like AI and machine learning, and seeking to co-create solutions with its clients. However, Fujitsu faces several challenges, including:
- Maintaining its competitive advantage in a rapidly evolving market.
- Balancing its focus on innovation with its existing business model.
- Attracting and retaining top talent in a competitive talent market.
3. Analysis of the Case Study
To analyze Fujitsu's situation, we can utilize several frameworks:
a) SWOT Analysis:
- Strengths: Strong brand reputation, extensive global reach, expertise in technology and analytics, strong financial position, and a dedicated workforce.
- Weaknesses: Bureaucratic organizational structure, slow decision-making processes, limited agility in adapting to new technologies, and a lack of focus on customer experience.
- Opportunities: Growing demand for digital transformation services, emerging markets with high growth potential, increasing adoption of cloud computing, and the rise of AI and machine learning.
- Threats: Competition from global technology giants, increasing commoditization of IT services, cybersecurity threats, and regulatory changes.
b) Porter's Five Forces Analysis:
- Threat of new entrants: High due to the low barriers to entry in the IT services market.
- Bargaining power of buyers: High due to the availability of numerous alternative solutions and the increasing commoditization of services.
- Bargaining power of suppliers: Moderate, with some dependence on specific technologies and expertise.
- Threat of substitute products: High due to the emergence of new technologies and the availability of open-source solutions.
- Rivalry among existing competitors: Intense due to the presence of numerous established players and the rapid pace of technological innovation.
c) Value Chain Analysis:
Fujitsu's value chain can be analyzed by examining its primary and support activities. Key areas for improvement include:
- Inbound logistics: Optimizing supply chain management and leveraging outsourcing to reduce costs.
- Operations: Investing in digital transformation to improve efficiency and agility.
- Outbound logistics: Enhancing customer service and delivery processes.
- Marketing and sales: Focusing on value proposition and product differentiation to attract new clients.
- Service: Offering comprehensive solutions and co-creating with clients to build long-term partnerships.
d) Business Model Innovation:
Fujitsu needs to explore new business models that address the changing needs of its customers. This could involve:
- Subscription-based services: Offering flexible and scalable solutions based on usage.
- Outcome-based pricing: Focusing on delivering specific results for clients instead of charging for services.
- Partnerships and alliances: Co-creating solutions with other companies to offer comprehensive services.
4. Recommendations
To achieve its objectives, Fujitsu should implement the following recommendations:
a) Strategic Focus:
- Embrace Digital Transformation: Fujitsu must actively embrace digital transformation within its own operations to become a more agile and customer-centric organization. This includes investing in new technologies, adopting cloud computing, and streamlining processes.
- Co-create Digital Business Solutions: Fujitsu should focus on co-creating digital business solutions with its clients. This involves understanding their specific needs, developing tailored solutions, and working collaboratively to achieve desired outcomes.
- Expand into New Markets: Fujitsu should aggressively pursue growth opportunities in emerging markets, particularly in Asia and Africa. This requires adapting its offerings to local needs and building strong partnerships with local players.
b) Operational Excellence:
- Optimize its Value Chain: Fujitsu needs to optimize its value chain by leveraging outsourcing, improving its supply chain management, and streamlining its internal processes.
- Invest in Technology and Analytics: Fujitsu should continue to invest in emerging technologies like AI and machine learning, Internet of Things, and blockchain. This will enable it to develop innovative solutions and stay ahead of the competition.
- Develop a Strong Talent Pool: Fujitsu must attract and retain top talent by offering competitive compensation, providing opportunities for professional development, and fostering a culture of innovation.
c) Brand Management:
- Strengthen its Brand: Fujitsu should focus on strengthening its brand by emphasizing its commitment to corporate social responsibility, environmental sustainability, and customer satisfaction.
- Enhance its Communication Strategy: Fujitsu needs to improve its communication strategy to effectively communicate its value proposition to its target audiences. This includes leveraging social media and other digital channels.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with Fujitsu's core competencies in technology and analytics while also supporting its mission to be a leading digital transformation partner.
- External customers and internal clients: The recommendations address the needs of both external customers and internal clients by focusing on value creation, customer experience, and employee engagement.
- Competitors: The recommendations aim to differentiate Fujitsu from its competitors by emphasizing innovation, co-creation, and a focus on emerging markets.
- Attractiveness: The recommendations are expected to generate significant value for Fujitsu through increased revenue, improved profitability, and enhanced brand reputation.
6. Conclusion
Fujitsu has a strong foundation to become a leading digital transformation partner. By embracing disruptive innovation, focusing on value creation, and actively engaging with its clients, Fujitsu can solidify its position in the rapidly evolving IT landscape.
7. Discussion
Alternative strategies include:
- Focusing solely on cost leadership: This could lead to a decline in brand reputation and customer loyalty.
- Merging with another company: This could create significant challenges in integrating operations and cultures.
- Exiting the IT services market: This would be a drastic measure and could result in significant job losses.
Key assumptions include:
- Continued growth in the demand for digital transformation services.
- Fujitsu's ability to successfully implement its recommended strategies.
- The willingness of clients to embrace co-creation and digital solutions.
8. Next Steps
To implement the recommended strategies, Fujitsu should:
- Develop a detailed implementation plan: This should include specific timelines, milestones, and resource allocation.
- Establish a dedicated team: This team should be responsible for driving the implementation of the strategies.
- Communicate the vision and strategy: This is crucial to ensure buy-in from employees and stakeholders.
- Monitor progress and make adjustments: Regularly assess the effectiveness of the strategies and make necessary adjustments.
By taking these steps, Fujitsu can successfully navigate the challenges of the digital age and emerge as a leading digital transformation partner.
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Case Description
In 2017, the president of Fujitsu Asia Pte. Ltd. in Singapore, a subsidiary of Japanese conglomerate Fujitsu Limited (Fujitsu) needed to decide between two project options that represented growth in different industries in Asia. Both projects represented Fujitsu's vision of connected services and could potentially be much-needed engines of new growth for Fujitsu Singapore over the next 5 to 10 years. The first option was to offer its Japanese-engineered cloud-computing platform to engage small and medium enterprises in the manufacturing industry. Given the high costs of customizing the existing platform for local use, the president wondered whether small and medium manufacturers would generate sufficient demand to justify such a costly investment. The second option was to leverage the success of Fujitsu's intelligent agricultural cloud-computing project with the Japanese government to offer vertical farming to Singapore and other Asian cities that faced similar space constraints but valued food resilience. But was it the right time to enter the agricultural industry? The president had limited time and resources, and needed to make a decision very soon.
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