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Fablab – PESTLE and SWOT Analysis

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Fablab – PESTLE and SWOT Analysis

Executive Summary

SWOT and PESTLE analysis is usually performed to identify critical aspects of a business and its opportunities, threats, strengths, and weaknesses. FabLab is a network of laboratories equipped with various devices that allow research and development in applied technologies. This project is in great demand among students who plan to realize themselves in engineering in the future or enter the market with a competitive invention. This report aims to present various aspects of the company and its business and determine the current and future factors that may influence the main business processes. Since the company’s business is represented in 30 countries, the report assesses the company’s performance on an international scale. The report uses PESTLE and SWOT analysis methods, as these tools allow forming a comprehensive view of the business. This report’s main findings relate to the discovery of particular threats to the company’s business. Specifically, this report recommends ensuring a more equitable distribution of technological and educational resources among laboratories and finding ways to increase interest among students and adults who do not have primary technical education. One of the company’s weaknesses is the lack of clearly defined initiatives that go beyond the main project and sustainable cooperation between the company and its alumni. Besides, the non-commercial nature of the organization’s activities can lead to a decrease in the motivation of consumers of its services.

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Introduction

FabLab is a network of labs equipped with various devices for designing the most unusual inventions. Officially, FabLab is a division of the Massachusetts Institute of Technology (CBA) Bits and Elements Center that brings together a community of learners, educators, technologists, researchers, manufacturers, and innovators (What is a FabLab, n.d.). Therefore, the project has created a knowledge exchange network that covers 30 countries. FabLab also offers consultancy services to help students and inventors start their businesses by selling and commercializing their inventions (Join FabFoundation UK, n.d.). Besides, the goal of creating FabLab is to increase the enrollment of students in technical universities with which the laboratories cooperate. This paper aims to present the PESTLE and SWOT analysis of FabLab and reveal the current and future factors that impact the company.

Political Factors – Strengths, Weaknesses, Opportunities, Threats

FabLab is practically invulnerable to threats from political turbulence, which is its strength. This invulnerability is because politics is separated from science in modern society, and technical innovations that can benefit the community are perceived favorably by all political regimes. A potential threat could be the use of technological discoveries for unethical purposes, such as developing weapons, but the company’s statute prohibits such activities. One possible opportunity is creating prerequisites for diplomatic communication between countries to discuss technical discoveries and potential cooperation.

Economic Factors – Strengths, Weaknesses, Opportunities, Threats

FabLab is built within a well-thought-out organizational structure, strategy, and business models, which is its strong point. Specifically, FabLab uses a decentralized ‘flatarchy’ organizational structure (Kenton, 2020). According to scholars, decentralized organizations operate on the principle of multiple technology start-ups, allowing companies to be flexible and provide each employee with a high level of personal involvement (Kenton, 2020). ‘Flatarchy’ structure is often used in start-ups, as it flattens out the hierarchy in the form of a chain of teams, giving ordinary employees a high level of autonomy (Kenton, 2020). The company’s website notes that “all FabLabs are local and independent; neither the global Fab Foundation nor the Fab Foundation UK has authority over any FabLab” (What is a FabLab, n.d.). The use of an organizational structure allows companies to be more focused, see their strategic objectives, and the ways to achieve them.

The main strategy models used in FabLab are the blue ocean strategy, differentiation strategy, and the targeted differentiation strategy. The blue ocean strategy describes a situation where a company refuses to compete in red oceans where harsh competition already exists and instead creates a new category of products or services. According to scientists, applying the blue ocean strategy requires “innovation, leadership, and imagination” (Business model vs. strategy, n.d., para. 28). Further, when choosing between cost and differentiation, FabLab chooses differentiation and targeted differentiation. It means that the company creates a competitive advantage by leveraging excellent customer service and innovation without reducing the price. Secondly, the company focuses on a relatively small client base – students of technical universities. Officially, FabLab calls itself a charitable organization, but it is more of a marketing project aimed at increasing new students’ recruitment to technical universities.

Among FabLab’s weaknesses, one can name limited opportunities in attracting customers, given the traditionally high cost of higher education. Another drawback is the uneven distribution of resources between laboratories in different countries. For example, FabLab built the original FabLab Bus, which accommodates 16 units of high-tech equipment, and runs around London 5 months a year, making parking near technical colleges and universities. The initiative aims at philanthropy and marketing, mainly promoting engineering among girls and young women and the retraining of workers, people with disabilities, and former maintenance personnel (The Maker Bus, n.d.). The idea is innovative and has high potential, but it is terrible that there is only one such bus, and the initiative operates only in the UK.

Key economic capabilities are provided by an efficient business model that helps FabLab promote engineering among younger generations. Since young inventors who want to become part of the FabLab community are charged only a small annual fee of £ 25, FabLab cannot support itself economically. But the nature of the laboratory’s activities enables young inventors to establish their own business or sell their patents (Join FabFoundation UK, n.d.). Moreover, one of the main activities of the laboratories is business consulting. The company’s main potential threat is the low level of technical education in schools, making it impossible for prospective students to appreciate the benefits of laboratories.

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Social Factors in the framework of SWOT

FabLab is highly ethical as it offers services that meet the needs of clients for education and self-realization and contribute to the development of society. Effective employee-related strategies, cultural alignment, and leadership for innovation also help strengthen the company’s position. In particular, FabLab is likely to implement an open-door HR strategy by ensuring effective communication with employees and using various communication channels to ensure transparency (Top 5 HR strategies, n.d.). FabLab has a healthy organizational culture and value system that makes it easy to provide cultural alignment (Perrin, n.d.). Besides, FabLab has innovation leadership characteristics, including risk tolerance, domain expertise, openness, low anxiety, emotional resilience, confidence, action orientation, collaborative inquiry, serious play, and paying attention (10 innovation leadership characteristics, n.d.).

On the other hand, weaknesses may be the lack of clear initiatives beyond the original project due to the decentralized organizational structure. The company’s strengths create new opportunities for it in terms of strengthening marketing efforts. The non-commercial nature of the laboratory’s activities can threaten its values, leading to a lack of motivation among inventors.

Technological Factors in the Framework of SWOT

Because FabLab is a technology innovation initiative, its key strengths lie in a robust scientific base of educators, technologists, researchers, manufacturers, and innovators. Laboratories have a large selection of technical equipment, including 3-D printers, cutting tools, computing technology (PrusaPrinters, n.d.). FabLab provides an inventory report of the used equipment, reflecting the sources of purchases (LMT Onsrud cutting tools, n.d.). Weaknesses can be expressed in the uneven distribution of resources, including the educational and scientific base between laboratories. A vast and well-designed range of equipment creates ample opportunities for students, allowing them to realize themselves as inventors. At the same time, business consulting services provide opportunities for young entrepreneurs to enter the market. One of the threats is constant improvements in technology, which can cause the need for equipment upgrades and fluctuations in the prices of component materials.

Legal Factors

One of the constituent aspects included in the acronym PESTLE is the legal level of the company’s work. Legal issues may include consumer protection, health, and safety regulations, employment law, international legislation, tax regulation, and industry-specific regulations (What is PESTLE analysis, n.d.). The company’s official website states that “the charities global Fab Foundation and Fab Foundation UK have “a president and chairman to register with their respective US and UK national authorities’” (What is a FabLab, n.d., para. 2). According to scientists, legal factors have external and internal sides (What is a PESTLE analysis tool, n.d.). External sides consider existing state and international laws, and internal sides consider the company’s internal policies.

Environmental Factors

FabLab is an environmentally friendly business, as it makes a significant contribution to scientific research and invention in the technologies field. At the same time, the company does not engage in production or other activities that could harm the environment. According to official information, the laboratories operate across 30 countries; therefore, the company’s activities are carried out in various environmental and weather conditions. The positive side of this diversity is the opportunity to develop inventions that interact with local communities’ climate and other environmental issues.

Conclusion

Thus, the PESTLE and SWOT analysis of FabLab was presented, unfolding the current and future factors likely to impact the company. The company’s most distinguished strengths are its potential in technology and social development. FabLab is a successful project from an economic point of view, as it realizes its main strategic goals. The company’s mission is to create opportunities for students and inventors worldwide, providing them with a place to work in an innovative environment. Threats to business can be related to the failure to meet strategic goals due to the low level of school education in technology. Besides, the company’s main weakness is the uneven distribution of resources.

References

10 innovation leadership characteristics (n.d.). Web.

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Business model vs. strategy: what’s the difference? (n.d.). Web/

Join Fab Foundation UK (n.d.). Web.

Kenton, W. (2020). Organizational structure. Web.

Kenton, W. (2020). Strategical management. Web.

LMT Onsrud cutting tools (n.d.). Web.

Perrin, O. (n.d.). 6 ideas to align people with company culture. Web.

PrusaPrinters (n.d.). Web.

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The Maker Bus: a Fab Lab-on-wheels. (n.d.). Web.

Top 5 HR strategies for effective employee relations (n.d.). Web.

What is a FabLab? (n.d.). Web.

What is PESTLE analysis? (n.d.). Web.

What is PESTLE analysis tool? (n.d.). Web.

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