Department of Accounting and Information Systems

University of Dhaka

Strategic Management (7112)

“Term Paper on OpenAI”

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Table of Contents

Introduction ..................................................................................................................................... 4

Vision Statement ............................................................................................................................. 5

Mission Statement........................................................................................................................... 5

External Analysis ............................................................................................................................ 6

Political ....................................................................................................................................... 6

Economic .................................................................................................................................... 6

Social........................................................................................................................................... 7

Technological .............................................................................................................................. 8

Environmental ............................................................................................................................. 9

Legal ......................................................................................................................................... 11

Competitors ............................................................................................................................... 12

List of Opportunities ................................................................................................................. 13

List of Threats: .......................................................................................................................... 14

External Factors Evaluation Matrix .............................................................................................. 15

Internal Analysis ........................................................................................................................... 17

Management Information Systems ........................................................................................... 17

Research and Development....................................................................................................... 17

Accounting and Finance ........................................................................................................... 18

Operations ................................................................................................................................. 20

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 Marketing .................................................................................................................................. 21

List of Strengths ........................................................................................................................ 22

List of Weaknesses ................................................................................................................... 22

Internal Factors Evaluation Matrix ............................................................................................... 23

SWOT Analysis ............................................................................................................................ 24

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Introduction
An AI research facility called OpenAI is made up of the for-profit OpenAI LP and the nonprofit
OpenAI Inc. A number of well-known figures in technology, including Elon Musk, Sam Altman,
Greg Brockman, Ilya Sutskever, John Schulman, and Wojciech Zaremba, co-founded the group
in 2015. The goal of OpenAI was to establish a company that would aid in the development of
useful AI systems that may serve humanity. One of the largest AI research groups in the world,
the organization was founded with an endowment of $1 billion from its founders and investors.
OpenAI initially concentrated on creating cutting-edge AI technologies and making them
accessible to researchers and developers everywhere. The company also contributed to the
advancement of cutting-edge robotics, natural language processing, and other fields of AI
research. The creation of GPT (Generative Pre-trained Transformer), a language model capable
of producing text that is human-like, was one of OpenAI's most important achievements. The
company has also made a substantial impact on computer vision, robotics, and reinforcement
learning. OpenAI said in 2019 that it would switch to a for-profit business model in order to raise
money to keep up its research and development operations. In order to make this shift, the
company established OpenAI LP, which is in charge of commercializing OpenAI's products and
forming alliances with other businesses. With a focus on creating AI technologies that advance
humanity, OpenAI has kept making important advancements in the field of artificial intelligence
research and development. The organization has urged for more regulation and monitoring of the
industry, but it has also been outspoken about the need for ethical and transparent AI research.

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Vision Statement
OpenAI envisions a world of autonomous systems where openAI would work hand in hand with
human efforts, ensuring benefits of all humanity and an environment of cooperation addressing
the challenges.

Mission Statement
OpenAI aims to provide autonomous solutions against impending challenges to AI users
worldwide including artificial intelligence for editing images, making videos or self-governing
coding for certain problems ensuring fulfilment of AI users' requirements for constant growth
and survival in the rapidly changing technological changes. Our motto is to create an
environment of cooperation for ultimate human benefits following responsibilities ethically with
constant improvements in the services as per the requirements of openAI service users for a
strong public image in the AI industry. We hope to maintain the competitive advantages that
openAI has got with an enormous embracing of openAI’s efforts by its users and enlarge the
scope of services making the non-users our loyal customers with innovations by our integral
employees.

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External Analysis
Political
The political factor refers to the influence of government and political institutions on a business
or organization. It involves examining the impact of government policies, regulations, political
stability, and the overall political climate on the company's operations, strategies, and decision-
making. The political factor is important because it directly influences businesses through
government regulations, market access, economic policies, trade relations, and innovation
support. Political decisions can create risks, affect profitability, and shape the business
environment. Understanding and analyzing the political landscape helps companies assess risks,
comply with regulations, and align strategies to thrive in a constantly changing environment
while maintaining a positive public image.

Opportunities

1. Global acceptance of AI technology by most of the governments

2. Creating positive rules and regulations by governments for AI’s mass implementation in
every sector.
3. Use of AI technology in governmental official works.

Threats

1. Strict policies created by some governments in terms of protecting data privacy.

2. Restricting of the use of AI in particular areas by the policymakers.
3. Rapid changes in the government policies regarding OpenAI’s accessibility to specific
database.

Economic
The economic factor refers to the macroeconomic conditions and trends that can impact a
business or organization. It involves assessing the overall economic health of a country or region
and understanding how factors such as economic growth, inflation rates, exchange rates, interest
rates, and unemployment rates can influence the business environment. Economic factors are
important because they significantly influence the overall business environment and directly
impact a company's performance and strategic decisions. Understanding macroeconomic

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conditions, such as economic growth, inflation rates, exchange rates, and unemployment, allows
businesses to anticipate changes in consumer behavior, market demand, and pricing dynamics.
Economic factors also influence a company's cost of capital, investment decisions, and access to
resources, shaping its ability to expand, innovate, and remain competitive. By considering
economic factors, businesses can mitigate risks, identify growth opportunities, and develop
resilient strategies that align with the prevailing economic conditions, ultimately ensuring their
long-term sustainability and success.

Opportunities

1. Increasing demand for AI technology will lead to growing demand for OpenAI’s other
products or services.
2. Global market demand of OpenAI for making potential revenue.
3. Rapid use of AI technology in business sector such as stock market.

Threats

1. Reduced demand of AI technology by business giants during financial crisis.

2. Reluctance to use premium services of OpenAI during economic recession by
individuals.

Social
The social factor refers to the demographic, cultural, and societal influences that can impact a
business or organization. It involves examining the social trends, beliefs, attitudes, lifestyles, and
values of the population in the company's target market or operating environment. Social factors
are important because they have a profound impact on consumer behavior, market demand, and
business operations. Understanding the demographic characteristics, cultural norms, and societal
trends of the target market allows businesses to tailor their products, marketing strategies, and
communication to effectively connect with customers. Social factors also influence issues related
to corporate social responsibility, environmental awareness, and ethical considerations, which
significantly impact a company's reputation and public perception. By considering social factors,
businesses can stay attuned to changing social values, align their offerings with customer
preferences, and build a positive brand image, ultimately enhancing their competitiveness and
long-term success in a socially conscious and culturally diverse landscape.

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Opportunities

1. Adaptability power of youths with the AI technology rapidly.

2. Government policies regarding AI technology increase the positive image towards
OpenAI.
3. creating more job opportunities for the youths.

Threats

1. Negative impact on unemployment due to AI technology may lead to fall in demand of

OpenAI.
2. Risk of data privacy and unethical use of AI technology may lose increased demand.

Technological
The technological factor refers to the impact of technological advancements and innovations on a
business or organization. It involves examining the rate of technological change, access to new
technologies, research and development activities, and the overall technological infrastructure.
Technological factors are crucial because they shape the business landscape by driving
innovation, productivity, and competitiveness. Embracing technological advancements allows
businesses to develop new products and services, streamline processes, and enhance efficiency,
which can lead to increased profitability and customer satisfaction. Technological factors also
impact industries through disruptive innovations, necessitating adaptability to stay relevant in the
market. Moreover, staying updated with technological trends is essential for businesses to
navigate digital transformations, cybersecurity challenges, and evolving customer preferences.
By understanding technological factors, companies can make informed decisions, seize
opportunities, and proactively respond to the dynamic technological landscape, positioning
themselves for sustainable growth and success in the digital era.

Opportunities

1. Enormous number of users coping with rapid changing AI technology.

2. Constant development in the AI sector to enhance better services to the clients.
3. Constant innovation and advancements of AI technology by tech giants.

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Threats

1. Extreme competition among tech giants in grabbing user’s attention.

2. Falling behind in terms of technological advancement compared with OpenAI’s
competitors.
3. Collaboration of competitors of OpenAI.

Environmental
The environmental factor refers to the influence of ecological and environmental considerations
on a business or organization. It involves examining factors such as climate change, natural
resources, pollution levels, environmental regulations, and sustainability practices.
Environmental factors are important because they have significant implications for businesses,
society, and the planet as a whole. With increasing concerns about climate change, resource
depletion, and environmental degradation, companies are under pressure to adopt sustainable
practices, minimize their ecological footprint, and address environmental challenges.
Compliance with environmental regulations is essential to avoid legal and reputational risks.
Moreover, environmentally conscious consumers are increasingly favoring eco-friendly products
and companies that demonstrate a commitment to environmental stewardship. Embracing
environmental factors enables businesses to improve their long-term viability, build a positive
brand image, attract environmentally aware customers and investors, and contribute to a more
sustainable and resilient future for the global community.

Opportunities

1. Use of AI technology can help reducing labor work that may impact on the environment
positively.
2. Establishing strong control system using AI technology.

Threats

1. Misuse of AI technology can create violence in the society.

2. Increased pressure due to the risk of losing job may affect the society adversely.

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Legal
The legal factor refers to the impact of laws, regulations, and legal systems on a business or
organization. It involves examining the legal framework in the company's operating
environment, including local, national, and international laws, as well as industry-specific
regulations and standards. Legal factors are important because they directly influence the
operations and conduct of businesses. Compliance with laws, regulations, and contractual
obligations is crucial for avoiding legal issues, financial penalties, and damage to a company's
reputation. Understanding and adhering to legal requirements, such as labor laws, consumer
protection regulations, data privacy laws, and intellectual property rights, helps businesses build
trust with customers, employees, and partners. Legal factors also impact international trade,
competition, and government contracts, making it essential for businesses to navigate legal
complexities to ensure fair and ethical business practices. By considering legal factors,
businesses can proactively manage legal risks, stay compliant, and foster a strong legal
foundation, contributing to their long-term success and sustainability.

Opportunities

1. Rules and regulations for ethical use of AI technology.

2. Government approval increases the social acceptance of AI technology.
3. Legal policies approve for advancements in AI technologies in certain areas.

Threats

1. Misuse related to AI technology may lead to litigation.

2. Unethical use of AI may limit the use of AI technology.
3. Stern policies may obstruct in developing AI technology.

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Competitors
Porter's Five Forces analysis is a strategic tool developed by Michael Porter to assess the
competitive forces within an industry or market. It helps businesses understand the level of
competition and attractiveness of an industry by examining five key factors. Porter's Five Forces
analysis is important because it provides businesses with valuable insights into the competitive
dynamics of their industry or market. By understanding the forces at play, businesses can
develop effective strategies to gain a competitive advantage, identify areas for improvement, and
make informed decisions about market entry, pricing, product differentiation, and overall
industry positioning.

Opportunities

1. In the field of artificial intelligence, OpenAI is more globally popular.

2. Adequacy of advanced developer compared to other competitors.
3. Easy to access compared to other AI service providers.

Threats

1. Intense Competition in the field of Artificial Intelligence in presence of tech giants like
google and Meta.
2. New entrants is intense in the market.
3. Substitute products developed by the competitors could be riskier such as Google’s
BARD.
4. Absence of barrier to entry for competitors.

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List of Opportunities
1. Global acceptance of AI technology by most of the governments
2. Creating positive rules and regulations by governments for AI’s mass
implementation in every sector.
3. Use of AI technology in governmental official works.
4. Increasing demand for AI technology will lead to growing demand for OpenAI’s
other products or services.
5. Global market demand of OpenAI for making potential revenue.
6. Rapid use of AI technology in business sector such as stock market.
7. Adaptability power of youths with the AI technology rapidly.
8. Government policies regarding AI technology increase the positive image towards
OpenAI.
9. creating more job opportunities for the youths.
10. Enormous number of users coping with rapid changing AI technology.
11. Constant development in the AI sector to enhance better services to the clients.
12. Constant innovation and advancements of AI technology by tech giants.
13. Use of AI technology can help reducing labor work that may impact on the
environment positively.
14. Establishing strong control system using AI technology.
15. Rules and regulations for ethical use of AI technology.
16. Government approval increases the social acceptance of AI technology.
17. Legal policies approve for advancements in AI technologies in certain areas.
18. In the field of artificial intelligence, OpenAI is more globally popular.
19. Adequacy of advanced developer compared to other competitors.
20. Easy to access compared to other AI service providers.

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List of Threats:
1. Strict policies created by some governments in terms of protecting data privacy.
2. Restricting of the use of AI in particular areas by the policymakers.
3. Rapid changes in the government policies regarding OpenAI’s accessibility to
specific database.
4. Reduced demand of AI technology by business giants during financial crisis.
5. Reluctance to use premium services of OpenAI during economic recession by
individuals.
6. Negative impact on unemployment due to AI technology may lead to fall in
demand of OpenAI.
7. Risk of data privacy and unethical use of AI technology may lose increased
demand.
8. Extreme competition among tech giants in grabbing user’s attention.
9. Falling behind in terms of technological advancement compared with OpenAI’s
competitors.
10. Collaboration of competitors of OpenAI.
11. Misuse of AI technology can create violence in the society.
12. Increased pressure due to the risk of losing job may affect the society adversely.
13. Misuse related to AI technology may lead to litigation.
14. Unethical use of AI may limit the use of AI technology.
15. Stern policies may obstruct in developing AI technology.
16. Intense Competition in the field of Artificial Intelligence in presence of tech
giants like google and Meta.
17. New entrants is intense in the market.
18. Substitute products developed by the competitors could be riskier such as
Google’s BARD.
19. Absence of barrier to entry for competitors.

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External Factors Evaluation Matrix

KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED

SCORE

Opportunities:

1. Global market demand of OpenAI for making potential

revenue
2. Rapid use of AI technology in business sector such as
stock market.
3. Government policies regarding AI technology increase
the positive image towards OpenAI.
4. Constant development in the AI sector to enhance
better services to the clients.
5. Rules and regulations for ethical use of AI technology.

6. Easy to access compared to other AI service providers.

7. Adequacy of advanced developer compared to other

competitors.
8. Legal policies approve for advancements in AI
technologies in certain areas
Threats:

1. Strict policies created by some governments in terms of

protecting data privacy.
2. Reluctance to use premium services of OpenAI during
economic recession by individuals.
3. Collaboration of competitors of OpenAI.

4. Risk of data privacy and unethical use of AI technology

may lose increased demand.

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5. Intense Competition in the field of Artificial
Intelligence in presence of tech giants like google and
Meta.
6. New entrants are intense in the market.

7. Substitute products developed by the competitors could

be riskier such as Google’s BARD.

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Internal Analysis
Management Information Systems
Management Information Systems refer to computerized systems that collect, process, store, and
distribute information to support managerial decision-making. It includes various software,
hardware, databases, and communication networks responsible for managing and maintaining the
system. MIS is important for internal analysis as it provides managers with access to timely and
relevant data, enabling them to make informed decisions, monitor performance, allocate
resources effectively, identify inefficiencies, forecast future trends, and enhance communication
and collaboration within the organization. By leveraging MIS, companies can improve
operational efficiency, strategic planning, and overall performance, ultimately gaining a
competitive advantage in the business environment.

Strengths

1. Strong collaboration with tech giants.

2. Adaptability and flexibility with the growing demand.

Weaknesses

1. Data security and privacy risks.

2. Obstruction in operational process due to excessive pressures from competitors

Research and Development

Research and Development refers to the systematic and strategic activities aimed at creating and
improving products, services, or processes through innovation and technological advancements.
R&D involves conducting experiments, exploring new ideas, and investing resources in projects
with the goal of developing new technologies, improving existing products, or enhancing
operational efficiency. It is essential for internal analysis as it helps companies assess their
innovation capabilities, identify areas for improvement, and align R&D efforts with strategic
goals. By analyzing R&D activities and outcomes, companies can gain insights into their
technological competitiveness, potential for future growth, and ability to stay ahead in a
competitive market. Effective R&D management allows businesses to maintain relevance, adapt

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to changing market demands, and foster continuous improvement, driving long-term success and
profitability.

Strengths

1. Enormous investment by collaborators for continuous research and development.

2. Strong manpower in terms of innovation for having top talents of the world.
3. Impactful research based on the demand of users.

Weaknesses

1. Development cost for research is too high.

2. Varied government policies obstruct development process.
3. Risk of misuse of AI technology.
4. Greater advancement in R&D sector of competitors.

Accounting and Finance

The Accounting and Finance function is managing financial records, transactions, and reporting
to provide accurate and transparent financial information. It includes activities such as
bookkeeping, financial statement preparation, budgeting, forecasting, financial analysis, and
decision support. The function is crucial for internal analysis as it provides insights into the
company's financial health, profitability, liquidity, and overall performance. By analyzing
financial data, management can assess the company's financial stability, identify areas of cost
inefficiency, make informed investment decisions, and set realistic financial goals. Furthermore,
internal analysis of accounting and finance data aids in measuring performance against targets,
identifying trends, and ensuring compliance with financial regulations, ultimately supporting
effective strategic planning and resource allocation for the company's growth and sustainability.

Strengths

1. Strong Financial Investment from Tech-Jaints like Microsoft and nine other reputed
investors.
2. High Revenue prospects for growing demand in AI technology
Weaknesses

1. Highly dependence on external financing.

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Operations
The Operations function refers to the management of the processes and activities involved in
delivering services to customers. It includes activities such as service design, service delivery,
resource allocation, workforce management, and quality assurance. In a service-oriented
company, the focus is on meeting customer needs, providing excellent customer experiences, and
ensuring service efficiency. Internal analysis of the Operations function is essential as it enables
the company to assess its service delivery processes, identify areas for improvement, optimize
resource utilization, and enhance service quality. By analyzing operations, the company can
streamline workflows, reduce service delivery times, and identify opportunities for innovation
and service differentiation. Ultimately, a well-managed Operations function is crucial for
maintaining customer satisfaction, building a strong reputation, and achieving long-term success
in the competitive service industry.

Strengths

1. Highly adaptable to the changing society.

2. Easy accessibility to users
Weaknesses

1. Limited focus on ethical considerations.

2. Poor user experience and interfaces.

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Marketing
The Marketing function involves activities related to promoting, advertising, and selling products
or services to customers. It includes market research, product development, pricing, branding,
advertising, sales, and customer relationship management. Marketing is vital for internal analysis
as it provides insights into customer preferences, market trends, and competitive positioning. By
analyzing marketing data, companies can assess the effectiveness of their marketing strategies,
understand customer behavior, and identify opportunities for market expansion or product
innovation. Additionally, internal analysis of the Marketing function allows companies to
optimize marketing budgets, allocate resources effectively, and tailor marketing efforts to target
specific customer segments, ultimately driving revenue growth, market share, and customer
loyalty.

Strengths
1. Strong Brand Image.
2. Strong Public engagement.
Weaknesses

1. Tough to maintain confidentiality issues against promoting activities.

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List of Strengths
1. Strong collaboration with tech giants.

2. Adaptability and flexibility with the growing demand.

3. Enormous investment by collaborators for continuous research and development.

4. Strong manpower in terms of innovation for having top talents of the world.

5. Impactful research based on the demand of users.

6. Strong Financial Investment from Tech-Jaints like Microsoft and nine other reputed
investors.

7. High Revenue prospects for growing demand in AI technology

8. Highly adaptable to the changing society.

9. Easy accessability to users.

10. Strong Brand Image.

List of Weaknesses
1. Data security and privacy risks.

2. Obstruction in operational process due to excessive pressures from competitors.

3. Development cost for research is too high.

4. Varied government policies obstruct development process.

5. Risk of misuse of AI technology.

6. Greater advancement in R&D sector of competitors.

7. Highly dependence on external financing.

8. Limited focus on ethical considerations.

9. Poor user experience and interfaces.

10. Tough to maintain confidentiality issues against promoting activities.

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Internal Factors Evaluation Matrix

KEY INTERNAL FACTORS WEIGHT RATING WEIGHTED

SCORE

Strengths:

Strong collaboration with tech giants.

Enormous investment by collaborators for continuous

research and development.

High Revenue prospects for growing demand in AI

technology

Strong Brand Image.

Highly adaptable to the changing society and flexibility

with the growing demand.
Strong Financial Investment from Tech-giants like
Microsoft and nine other reputed investors.

Weaknesses:

Data security and privacy risks.

Tough to maintain confidentiality issues against promoting

activities.

Poor user experience and interfaces.

Highly dependence on external financing.

Varied government policies obstruct OpenAI’s services

development process.

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SWOT Analysis
Strengths: Weaknesses

Opportunities: SO Strategies: WO Strategies:

Threats: ST Strategies: WT Strategies:

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25
Quantitative Strategic Planning Matrix

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