Komatsu and Dresser: Putting Two Plus Two Together SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Komatsu and Dresser: Putting Two Plus Two Together
In 1987, Komatsu Ltd., looking to expand its presence in the U.S. earth-moving equipment (EME) industry, enters into a 50-50 joint venture with Dresser. The management of the Komatsu Dresser joint venture faces difficulty in bringing the two halves together. The rift between the dealership networks of the two parent companies reflects dissension within the organization. Even as management is trying to come to grips with the internal problems, the industry confronts a severe recession. A rewritten version of earlier cases.
Swot Analysis of "Komatsu and Dresser: Putting Two Plus Two Together" written by Ashish Nanda, Georgia Levenson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dresser Komatsu facing as an external strategic factors. Some of the topics covered in Komatsu and Dresser: Putting Two Plus Two Together case study are - Strategic Management Strategies, International business, Joint ventures, Operations management, Reorganization and Organizational Development.
Some of the macro environment factors that can be used to understand the Komatsu and Dresser: Putting Two Plus Two Together casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, technology disruption, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Komatsu and Dresser: Putting Two Plus Two Together
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Komatsu and Dresser: Putting Two Plus Two Together case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dresser Komatsu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dresser Komatsu 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 Komatsu and Dresser: Putting Two Plus Two Together can be done for the following purposes –
1. Strategic planning using facts provided in Komatsu and Dresser: Putting Two Plus Two Together case study
2. Improving business portfolio management of Dresser Komatsu
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 Dresser Komatsu
Strengths Komatsu and Dresser: Putting Two Plus Two Together | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dresser Komatsu in Komatsu and Dresser: Putting Two Plus Two Together Harvard Business Review case study are -
Innovation driven organization
– Dresser Komatsu is one of the most innovative firm in sector. Manager in Komatsu and Dresser: Putting Two Plus Two Together Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Dresser Komatsu in the sector have low bargaining power. Komatsu and Dresser: Putting Two Plus Two Together has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dresser Komatsu to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Dresser Komatsu is present in almost all the verticals within the industry. This has provided firm in Komatsu and Dresser: Putting Two Plus Two Together 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.
High brand equity
– Dresser Komatsu has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dresser Komatsu to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Dresser Komatsu 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 Dresser Komatsu 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.
Analytics focus
– Dresser Komatsu 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 Ashish Nanda, Georgia Levenson 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.
Strong track record of project management
– Dresser Komatsu is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Dresser Komatsu has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dresser Komatsu 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.
Operational resilience
– The operational resilience strategy in the Komatsu and Dresser: Putting Two Plus Two Together 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.
Ability to lead change in Organizational Development field
– Dresser Komatsu 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 Dresser Komatsu in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Dresser Komatsu 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 Komatsu and Dresser: Putting Two Plus Two Together - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Komatsu and Dresser: Putting Two Plus Two Together | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Komatsu and Dresser: Putting Two Plus Two Together are -
Workers concerns about automation
– As automation is fast increasing in the segment, Dresser Komatsu 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.
Products dominated business model
– Even though Dresser Komatsu 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 - Komatsu and Dresser: Putting Two Plus Two Together should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Komatsu and Dresser: Putting Two Plus Two Together, it seems that the employees of Dresser Komatsu don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Dresser Komatsu 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.
No frontier risks strategy
– After analyzing the HBR case study Komatsu and Dresser: Putting Two Plus Two Together, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Komatsu and Dresser: Putting Two Plus Two Together, in the dynamic environment Dresser Komatsu has struggled to respond to the nimble upstart competition. Dresser Komatsu has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Dresser Komatsu 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. Dresser Komatsu 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.
Increasing silos among functional specialists
– The organizational structure of Dresser Komatsu is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Dresser Komatsu needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dresser Komatsu 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 Komatsu and Dresser: Putting Two Plus Two Together 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 Dresser Komatsu has relatively successful track record of launching new products.
High cash cycle compare to competitors
Dresser Komatsu 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dresser Komatsu is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Komatsu and Dresser: Putting Two Plus Two Together 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 Komatsu and Dresser: Putting Two Plus Two Together | 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 Komatsu and Dresser: Putting Two Plus Two Together are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dresser Komatsu can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Komatsu and Dresser: Putting Two Plus Two Together, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Dresser Komatsu 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.
Creating value in data economy
– The success of analytics program of Dresser Komatsu has opened avenues for new revenue streams for the organization in the industry. This can help Dresser Komatsu to build a more holistic ecosystem as suggested in the Komatsu and Dresser: Putting Two Plus Two Together case study. Dresser Komatsu can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Dresser Komatsu 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.
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 Dresser Komatsu 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.
Loyalty marketing
– Dresser Komatsu 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dresser Komatsu is facing challenges because of the dominance of functional experts in the organization. Komatsu and Dresser: Putting Two Plus Two Together 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.
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. Dresser Komatsu can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dresser Komatsu 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. Dresser Komatsu 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dresser Komatsu can use these opportunities to build new business models that can help the communities that Dresser Komatsu operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Developing new processes and practices
– Dresser Komatsu 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dresser Komatsu 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.
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. Dresser Komatsu can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Komatsu and Dresser: Putting Two Plus Two Together External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Komatsu and Dresser: Putting Two Plus Two Together are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dresser Komatsu 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 Komatsu and Dresser: Putting Two Plus Two Together .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dresser Komatsu 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.
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 Dresser Komatsu business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Komatsu and Dresser: Putting Two Plus Two Together, Dresser Komatsu 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dresser Komatsu with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Dresser Komatsu 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. Dresser Komatsu can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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. Dresser Komatsu needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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 Dresser Komatsu in the Organizational Development sector and impact the bottomline of the organization.
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 Dresser Komatsu.
Increasing wage structure of Dresser Komatsu
– 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 Dresser Komatsu.
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. Dresser Komatsu can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Dresser Komatsu 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.
High dependence on third party suppliers
– Dresser Komatsu 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.
Weighted SWOT Analysis of Komatsu and Dresser: Putting Two Plus Two Together 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 Komatsu and Dresser: Putting Two Plus Two Together 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 Komatsu and Dresser: Putting Two Plus Two Together 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 Komatsu and Dresser: Putting Two Plus Two Together 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 Komatsu and Dresser: Putting Two Plus Two Together 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 Dresser Komatsu needs to make to build a sustainable competitive advantage.
