Rudi Gassner and the Executive Committee of BMG International (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Rudi Gassner and the Executive Committee of BMG International (A)
Explores the roles of CEO Rudi Gassner and the 9-person executive committee in leading BMG International. BMG International is the international music subsidiary of Bertlesmann, a German company that is the second-largest media conglomerate in the world. Describes a 1993 decision that Gassner and the executive committee must make about whether or not to change managers' business plans and bonus targets as a result of a newly negotiate reduced manufacturing cost. Allows for discussion of a number of timely and important issues: 1) the complexities of managing and growing a large global business; 2) the tensions between centralized corporate control and decentralized local management in a global organization; 3) the impact of leadership style on corporate culture and performance; 4) the challenges of leading a senior mangement team; and 5) the final decision by CEO Rudi Gassner and the subsequent actions taken by the members of the executive committee.
Swot Analysis of "Rudi Gassner and the Executive Committee of BMG International (A)" written by Linda A. Hill, Katherine S. Weber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gassner Rudi facing as an external strategic factors. Some of the topics covered in Rudi Gassner and the Executive Committee of BMG International (A) case study are - Strategic Management Strategies, Change management, Corporate communications, Cross-cultural management, Decision making, Growth strategy, Influence, Leadership, Managing people, Organizational culture, Strategic planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Rudi Gassner and the Executive Committee of BMG International (A) casestudy better are - – increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, wage bills are increasing,
geopolitical disruptions, there is backlash against globalization, etc
Introduction to SWOT Analysis of Rudi Gassner and the Executive Committee of BMG International (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rudi Gassner and the Executive Committee of BMG International (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gassner Rudi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gassner Rudi 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 Rudi Gassner and the Executive Committee of BMG International (A) can be done for the following purposes –
1. Strategic planning using facts provided in Rudi Gassner and the Executive Committee of BMG International (A) case study
2. Improving business portfolio management of Gassner Rudi
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 Gassner Rudi
Strengths Rudi Gassner and the Executive Committee of BMG International (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gassner Rudi in Rudi Gassner and the Executive Committee of BMG International (A) Harvard Business Review case study are -
Highly skilled collaborators
– Gassner Rudi has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Rudi Gassner and the Executive Committee of BMG International (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Gassner Rudi 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 Linda A. Hill, Katherine S. Weber 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.
Organizational Resilience of Gassner Rudi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gassner Rudi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Gassner Rudi is present in almost all the verticals within the industry. This has provided firm in Rudi Gassner and the Executive Committee of BMG International (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Leadership & Managing People industry
– Rudi Gassner and the Executive Committee of BMG International (A) firm has clearly differentiated products in the market place. This has enabled Gassner Rudi to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Gassner Rudi to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Gassner Rudi has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Gassner Rudi digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gassner Rudi 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.
Low bargaining power of suppliers
– Suppliers of Gassner Rudi in the sector have low bargaining power. Rudi Gassner and the Executive Committee of BMG International (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gassner Rudi to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Gassner Rudi is one of the leading recruiters in the industry. Managers in the Rudi Gassner and the Executive Committee of BMG International (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Rudi Gassner and the Executive Committee of BMG International (A) 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.
Superior customer experience
– The customer experience strategy of Gassner Rudi in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Gassner Rudi 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 Gassner Rudi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rudi Gassner and the Executive Committee of BMG International (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Rudi Gassner and the Executive Committee of BMG International (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rudi Gassner and the Executive Committee of BMG International (A) are -
High cash cycle compare to competitors
Gassner Rudi 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Rudi Gassner and the Executive Committee of BMG International (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Gassner Rudi has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Rudi Gassner and the Executive Committee of BMG International (A), 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Gassner Rudi supply chain. Even after few cautionary changes mentioned in the HBR case study - Rudi Gassner and the Executive Committee of BMG International (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gassner Rudi vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Gassner Rudi has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Linda A. Hill, Katherine S. Weber suggests that, Gassner Rudi 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Rudi Gassner and the Executive Committee of BMG International (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Gassner Rudi 's lucrative customers.
Slow to strategic competitive environment developments
– As Rudi Gassner and the Executive Committee of BMG International (A) HBR case study mentions - Gassner Rudi takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Gassner Rudi, firm in the HBR case study Rudi Gassner and the Executive Committee of BMG International (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Gassner Rudi has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Gassner Rudi needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Rudi Gassner and the Executive Committee of BMG International (A) | 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 Rudi Gassner and the Executive Committee of BMG International (A) are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gassner Rudi in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Gassner Rudi to increase its market reach. Gassner Rudi 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.
Leveraging digital technologies
– Gassner Rudi 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.
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. Gassner Rudi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Gassner Rudi has opened avenues for new revenue streams for the organization in the industry. This can help Gassner Rudi to build a more holistic ecosystem as suggested in the Rudi Gassner and the Executive Committee of BMG International (A) case study. Gassner Rudi can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Gassner Rudi 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gassner Rudi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Gassner Rudi 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Gassner Rudi in the consumer business. Now Gassner Rudi can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Gassner Rudi 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. Gassner Rudi 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. Gassner Rudi 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.
Using analytics as competitive advantage
– Gassner Rudi 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 Rudi Gassner and the Executive Committee of BMG International (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gassner Rudi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Gassner Rudi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Rudi Gassner and the Executive Committee of BMG International (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rudi Gassner and the Executive Committee of BMG International (A) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gassner Rudi 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 Rudi Gassner and the Executive Committee of BMG International (A) .
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. Gassner Rudi needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Gassner Rudi business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Gassner Rudi 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.
High dependence on third party suppliers
– Gassner Rudi 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.
Consumer confidence and its impact on Gassner Rudi demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Gassner Rudi is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Gassner Rudi in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Gassner Rudi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Gassner Rudi
– 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 Gassner Rudi.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Rudi Gassner and the Executive Committee of BMG International (A), Gassner Rudi 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 .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Gassner Rudi will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Gassner Rudi has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Gassner Rudi needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Rudi Gassner and the Executive Committee of BMG International (A) 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 Rudi Gassner and the Executive Committee of BMG International (A) 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 Rudi Gassner and the Executive Committee of BMG International (A) 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 Rudi Gassner and the Executive Committee of BMG International (A) 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 Rudi Gassner and the Executive Committee of BMG International (A) 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 Gassner Rudi needs to make to build a sustainable competitive advantage.