OLPC/Negropante needs to reach five million minimum laptop orders before starting production or else the cost of producing the laptops would be exorbitant. Although there have been six million purchase orders from various countries there are still no firm deals in place (i.e. no deposits, etc.). The new concept of the laptop as revolutionary teaching tool that Negropante espouses, one that is child-centric, that allows children to play and build without restrictions (of Microsoft’s suite of software) must also be proven in order for the project to gain more acceptance as an educational laptop of choice.
II. SWOT analysis
The organization’s internal Strengths & product’s strengths include the following: 1. The company’s founder is a successful VC who is well known for being a social entrepreneur has connections and is considered a favoured figure amongst national leaders whose motives are less likely questioned. 2. OLPC as a non-profit organization/project, created to champion the human right of primary education, is admired and trusted by many and is seen as an entity driven to really help and not just out to make profits. 3. Strongly backed up and supported and even funded by various international organizations and technology companies including: UN, AMD, Google, Red Hat, Brightstar, Marvell, eBay & New Corphas strengthens its credibility and ability to innovate. 4. First-mover advantage in introducing a low-priced laptop. 5. The $ 100 laptop has the lowest price in the low-priced category of laptops and is therefore the most affordable. 6. Technical aspects of design that provided the laptop a competitive edge, thanks to the global design contributors brought about the computer’s attractive features: light-weight, built-in Wi-fi connectivity, router/connection device, rugged/tough, low-power LCD screen & processor & LiPeFo4 batteries (less toxic). 7. On the manufacturing side, OLPC is assured by Quanta to produce a million laptops per month, this quick production is quite amazing considering that the global production of laptops totals only 5 million units per month. While its Weaknesses are as follows:
1. In the technology industry, the first-mover advantage does not last long. OLPC needs to act fast and start producing the laptops before competition starts learning from their mistakes and can eventually overtake them. 2. The laptop has no global brand recognition unlike most of its competitors who are established & seasoned players in the industry. 3. The low-pricing strategy might send out wrong signals that the quality of the laptop is inferior and substandard. 4. Supplier power is very strong given that they do not have a well established supply chain, a single unit needing to source out 800 parts from multiple suppliers. 5. The $200-250 million per nation investment scheme is an exorbitant amount most especially for developing countries.
An external analysis of the industry shows the below Opportunities: 1. Estimate of worldwide PC usage is 1 billion (in 2008) which will double by 2015, the bulk of growth expected in the BRIC countries. 2. Broad worldwide consensus that education especially through technology would alleviate hardship in developing countries. and its Threats:
1. Reports of some US schools that laptops are instead becoming distractions and that they have found no evidence in increased improvements of students is an alarming and valid concern that can stop the OLPC project. 2. Prevailing perception that developing nations should first address issues of more basic necessities such as food, shelter, electricity and health; therefore, funds should be focused here instead of being funnelled to education and/or technology. 3. Aside from having limited funds, governments of developing countries are well known as being highly bureaucratic and have as stated in the case a fickle nature;...