ABB (A): The Barnevik Era (1988-2001) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ABB (A): The Barnevik Era (1988-2001)
Examines the evolution of ABB under its four leaders, from the merger to 2002. Describes the history of both companies--Asea AB and Brown Boveri et Cie--the rationale for the merger, the merger process, and the integration and restructuring of the company under Percy Barnevik, the first CEO of ABB. Why was the merger so successful? What were the advantages and disadvantages of Barnevik's management system, especially the highly decentralized matrix structure? How did this structure serve ABB? At the end of 1996, Barnevik decided to step down as CEO. Who would succeed him? What challenges would the new CEO face?
Swot Analysis of "ABB (A): The Barnevik Era (1988-2001)" written by Paul Strebel, Nanci Govinder includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abb Barnevik facing as an external strategic factors. Some of the topics covered in ABB (A): The Barnevik Era (1988-2001) case study are - Strategic Management Strategies, Leadership, Mergers & acquisitions, Negotiations, Organizational structure, Reorganization and Organizational Development.
Some of the macro environment factors that can be used to understand the ABB (A): The Barnevik Era (1988-2001) casestudy better are - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion,
increasing commodity prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of ABB (A): The Barnevik Era (1988-2001)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ABB (A): The Barnevik Era (1988-2001) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abb Barnevik, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abb Barnevik 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 ABB (A): The Barnevik Era (1988-2001) can be done for the following purposes –
1. Strategic planning using facts provided in ABB (A): The Barnevik Era (1988-2001) case study
2. Improving business portfolio management of Abb Barnevik
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 Abb Barnevik
Strengths ABB (A): The Barnevik Era (1988-2001) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abb Barnevik in ABB (A): The Barnevik Era (1988-2001) Harvard Business Review case study are -
Organizational Resilience of Abb Barnevik
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Abb Barnevik does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Abb Barnevik is present in almost all the verticals within the industry. This has provided firm in ABB (A): The Barnevik Era (1988-2001) 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Abb Barnevik digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Abb Barnevik 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 Abb Barnevik in the sector have low bargaining power. ABB (A): The Barnevik Era (1988-2001) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abb Barnevik to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Organizational Development field
– Abb Barnevik is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Abb Barnevik in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Abb Barnevik 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 Abb Barnevik is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ABB (A): The Barnevik Era (1988-2001) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Abb Barnevik is one of the leading recruiters in the industry. Managers in the ABB (A): The Barnevik Era (1988-2001) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Abb Barnevik has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abb Barnevik 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.
Highly skilled collaborators
– Abb Barnevik 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 ABB (A): The Barnevik Era (1988-2001) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Abb Barnevik 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 ABB (A): The Barnevik Era (1988-2001) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the ABB (A): The Barnevik Era (1988-2001) 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.
Innovation driven organization
– Abb Barnevik is one of the most innovative firm in sector. Manager in ABB (A): The Barnevik Era (1988-2001) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses ABB (A): The Barnevik Era (1988-2001) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ABB (A): The Barnevik Era (1988-2001) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Abb Barnevik is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ABB (A): The Barnevik Era (1988-2001) 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 Abb Barnevik 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 operating costs
– Compare to the competitors, firm in the HBR case study ABB (A): The Barnevik Era (1988-2001) 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 Abb Barnevik 's lucrative customers.
Aligning sales with marketing
– It come across in the case study ABB (A): The Barnevik Era (1988-2001) 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 ABB (A): The Barnevik Era (1988-2001) can leverage the sales team experience to cultivate customer relationships as Abb Barnevik is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As ABB (A): The Barnevik Era (1988-2001) HBR case study mentions - Abb Barnevik 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.
No frontier risks strategy
– After analyzing the HBR case study ABB (A): The Barnevik Era (1988-2001), 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Paul Strebel, Nanci Govinder suggests that, Abb Barnevik 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.
Increasing silos among functional specialists
– The organizational structure of Abb Barnevik is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Abb Barnevik needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abb Barnevik to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the ABB (A): The Barnevik Era (1988-2001) 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 Abb Barnevik has relatively successful track record of launching new products.
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 Abb Barnevik supply chain. Even after few cautionary changes mentioned in the HBR case study - ABB (A): The Barnevik Era (1988-2001), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Abb Barnevik vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Abb Barnevik products
– To increase the profitability and margins on the products, Abb Barnevik needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities ABB (A): The Barnevik Era (1988-2001) | 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 ABB (A): The Barnevik Era (1988-2001) are -
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 Abb Barnevik in the consumer business. Now Abb Barnevik can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Abb Barnevik 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Abb Barnevik can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Abb Barnevik 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.
Better consumer reach
– The expansion of the 5G network will help Abb Barnevik to increase its market reach. Abb Barnevik 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Abb Barnevik in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Loyalty marketing
– Abb Barnevik 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.
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 Abb Barnevik 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Abb Barnevik can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abb Barnevik can use these opportunities to build new business models that can help the communities that Abb Barnevik 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 Abb Barnevik has opened avenues for new revenue streams for the organization in the industry. This can help Abb Barnevik to build a more holistic ecosystem as suggested in the ABB (A): The Barnevik Era (1988-2001) case study. Abb Barnevik can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Abb Barnevik 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.
Using analytics as competitive advantage
– Abb Barnevik 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 ABB (A): The Barnevik Era (1988-2001) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Abb Barnevik to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats ABB (A): The Barnevik Era (1988-2001) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ABB (A): The Barnevik Era (1988-2001) are -
Regulatory challenges
– Abb Barnevik 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.
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. Abb Barnevik can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Abb Barnevik 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. Abb Barnevik can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ABB (A): The Barnevik Era (1988-2001), Abb Barnevik 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Abb Barnevik 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 ABB (A): The Barnevik Era (1988-2001) .
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. Abb Barnevik 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.
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 Abb Barnevik business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Abb Barnevik 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 Abb Barnevik.
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.
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.
Increasing wage structure of Abb Barnevik
– 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 Abb Barnevik.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Abb Barnevik 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.
Weighted SWOT Analysis of ABB (A): The Barnevik Era (1988-2001) 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 ABB (A): The Barnevik Era (1988-2001) 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 ABB (A): The Barnevik Era (1988-2001) 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 ABB (A): The Barnevik Era (1988-2001) 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 ABB (A): The Barnevik Era (1988-2001) 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 Abb Barnevik needs to make to build a sustainable competitive advantage.