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 - – wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, geopolitical disruptions,
cloud computing is disrupting traditional business models, increasing transportation and logistics costs, 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 -
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.
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.
Sustainable margins compare to other players in Organizational Development industry
– Governance at Metallgesellschaft (A) firm has clearly differentiated products in the market place. This has enabled Metallgesellschaft Mg to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Metallgesellschaft Mg to invest into research and development (R&D) and innovation.
Organizational Resilience of Metallgesellschaft Mg
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Metallgesellschaft Mg does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Metallgesellschaft Mg has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Metallgesellschaft Mg to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
High switching costs
– The high switching costs that Metallgesellschaft Mg 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.
Highly skilled collaborators
– Metallgesellschaft Mg 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 Governance at Metallgesellschaft (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Cross disciplinary teams
– Horizontal connected teams at the Metallgesellschaft Mg are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
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.
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.
Need for greater diversity
– Metallgesellschaft Mg 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.
No frontier risks strategy
– After analyzing the HBR case study Governance at Metallgesellschaft (A), it seems that company is thinking about the frontier risks that can impact Organizational Development 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Governance at Metallgesellschaft (A), in the dynamic environment Metallgesellschaft Mg has struggled to respond to the nimble upstart competition. Metallgesellschaft Mg has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
Aligning sales with marketing
– It come across in the case study Governance at Metallgesellschaft (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Governance at Metallgesellschaft (A) can leverage the sales team experience to cultivate customer relationships as Metallgesellschaft Mg is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Metallgesellschaft Mg has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Metallgesellschaft Mg even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Metallgesellschaft Mg products
– To increase the profitability and margins on the products, Metallgesellschaft Mg needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
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.
Leveraging digital technologies
– Metallgesellschaft Mg 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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Metallgesellschaft Mg can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Metallgesellschaft Mg can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
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 Metallgesellschaft Mg in the consumer business. Now Metallgesellschaft Mg can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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 -
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.
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.
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.
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.
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 Metallgesellschaft Mg in the Organizational Development sector and impact the bottomline of the organization.
Consumer confidence and its impact on Metallgesellschaft Mg 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.
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.
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.
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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Metallgesellschaft Mg
– 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 Metallgesellschaft Mg.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.