Case Study Description of Governance at Metallgesellschaft (A)
MG Corp., a U.S. subsidiary of Germany's international conglomerate, Metallgesellschaft, engaged in a disastrous hedging strategy that nearly dragged the entire enterprise into bankruptcy. This case explores issues of responsibility and accountability among the relevant boards. In doing so, it highlights the German two-tier board system of governance.
Swot Analysis of "Governance at Metallgesellschaft (A)" written by Jay W. Lorsch, Samantha K. Graff includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Metallgesellschaft Mg facing as an external strategic factors. Some of the topics covered in Governance at Metallgesellschaft (A) case study are - Strategic Management Strategies, Crisis management, Financial management, Social responsibility and Organizational Development.
Some of the macro environment factors that can be used to understand the Governance at Metallgesellschaft (A) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, technology disruption, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, there is backlash against globalization, etc
Introduction to SWOT Analysis of Governance at Metallgesellschaft (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Governance at Metallgesellschaft (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Metallgesellschaft Mg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Metallgesellschaft Mg 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 Governance at Metallgesellschaft (A) can be done for the following purposes –
1. Strategic planning using facts provided in Governance at Metallgesellschaft (A) case study
2. Improving business portfolio management of Metallgesellschaft Mg
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Metallgesellschaft Mg
Strengths Governance at Metallgesellschaft (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Metallgesellschaft Mg in Governance at Metallgesellschaft (A) Harvard Business Review case study are -
Learning organization
- Metallgesellschaft Mg 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 Metallgesellschaft Mg is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Governance at Metallgesellschaft (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Metallgesellschaft Mg is one of the leading recruiters in the industry. Managers in the Governance at Metallgesellschaft (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.
Low bargaining power of suppliers
– Suppliers of Metallgesellschaft Mg in the sector have low bargaining power. Governance at Metallgesellschaft (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Metallgesellschaft Mg to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Metallgesellschaft Mg digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Metallgesellschaft Mg 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.
Effective Research and Development (R&D)
– Metallgesellschaft Mg has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Governance at Metallgesellschaft (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Metallgesellschaft Mg is present in almost all the verticals within the industry. This has provided firm in Governance at Metallgesellschaft (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.
Innovation driven organization
– Metallgesellschaft Mg is one of the most innovative firm in sector. Manager in Governance at Metallgesellschaft (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Metallgesellschaft Mg in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Governance at Metallgesellschaft (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.
Successful track record of launching new products
– Metallgesellschaft Mg has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Metallgesellschaft Mg has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Metallgesellschaft Mg is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Metallgesellschaft Mg 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 Jay W. Lorsch, Samantha K. Graff 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.
Weaknesses Governance at Metallgesellschaft (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Governance at Metallgesellschaft (A) are -
High bargaining power of channel partners
– Because of the regulatory requirements, Jay W. Lorsch, Samantha K. Graff suggests that, Metallgesellschaft Mg 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Governance at Metallgesellschaft (A), is just above the industry average. Metallgesellschaft Mg needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Products dominated business model
– Even though Metallgesellschaft Mg has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Governance at Metallgesellschaft (A) should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Metallgesellschaft Mg 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Metallgesellschaft Mg is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Governance at Metallgesellschaft (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Metallgesellschaft Mg has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Governance at Metallgesellschaft (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 Metallgesellschaft Mg has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Governance at Metallgesellschaft (A) HBR case study mentions - Metallgesellschaft Mg 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Governance at Metallgesellschaft (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 Metallgesellschaft Mg 's lucrative customers.
High cash cycle compare to competitors
Metallgesellschaft Mg 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.
Interest costs
– Compare to the competition, Metallgesellschaft Mg has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Governance at Metallgesellschaft (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 Governance at Metallgesellschaft (A) are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Metallgesellschaft Mg can use these opportunities to build new business models that can help the communities that Metallgesellschaft Mg operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Manufacturing automation
– Metallgesellschaft Mg can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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 Metallgesellschaft Mg 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.
Creating value in data economy
– The success of analytics program of Metallgesellschaft Mg has opened avenues for new revenue streams for the organization in the industry. This can help Metallgesellschaft Mg to build a more holistic ecosystem as suggested in the Governance at Metallgesellschaft (A) case study. Metallgesellschaft Mg can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Metallgesellschaft Mg 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 Governance at Metallgesellschaft (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Metallgesellschaft Mg to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Metallgesellschaft Mg 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.
Loyalty marketing
– Metallgesellschaft Mg 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 Metallgesellschaft Mg can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Metallgesellschaft Mg to increase its market reach. Metallgesellschaft Mg 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.
Buying journey improvements
– Metallgesellschaft Mg can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Governance at Metallgesellschaft (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Metallgesellschaft Mg is facing challenges because of the dominance of functional experts in the organization. Governance at Metallgesellschaft (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Metallgesellschaft Mg can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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. Metallgesellschaft Mg can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Governance at Metallgesellschaft (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Governance at Metallgesellschaft (A) are -
Technology acceleration in Forth Industrial Revolution
– Metallgesellschaft Mg has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Metallgesellschaft Mg needs to keep up with the evolution of technology in the Organizational Development 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.
Regulatory challenges
– Metallgesellschaft Mg needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Shortening product life cycle
– it is one of the major threat that Metallgesellschaft Mg is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Metallgesellschaft Mg.
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 Metallgesellschaft Mg business can come under increasing regulations regarding data privacy, data security, etc.
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. Metallgesellschaft Mg 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Metallgesellschaft Mg in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Metallgesellschaft Mg 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Governance at Metallgesellschaft (A), Metallgesellschaft Mg may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Environmental challenges
– Metallgesellschaft Mg needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Metallgesellschaft Mg can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Metallgesellschaft Mg with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Metallgesellschaft Mg 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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Metallgesellschaft Mg can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Governance at Metallgesellschaft (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 Governance at Metallgesellschaft (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 Governance at Metallgesellschaft (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 Governance at Metallgesellschaft (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 Governance at Metallgesellschaft (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 Metallgesellschaft Mg needs to make to build a sustainable competitive advantage.
