Case Study Description of Asociacion Chilena de Seguridad (ACHS)
Outlines the history of the Asociacion Chilena de Seguridad (ACHS), a nonprofit organization dedicated to the prevention, treatment, and rehabilitation of work-related accidents and illnesses. ACHS is part of the Chilean system of "workers insurance organizations," known generically as "mutuales." By law, these organizations may not be administered directly or indirectly by any for-profit company. At the end of 2003, ACHS administered seven hospitals, 27 clinics, and 70 medical centers throughout Chile. However, due to efficiency in accident prevention and advancements in medical treatment, hospital infrastructure far exceeded demand. To deal with this problem, ACHS is reviewing a possible alliance with one of its competitors. Focuses on this dilemma, along with the pending succession of the organization's president, who has led for 45 years. Illustrates the delicate balance between pursuing financial goals and remaining loyal to the organization's mission.
Swot Analysis of "Asociacion Chilena de Seguridad (ACHS)" written by Mladen Koljatic, Monica Silva includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Achs Chilena facing as an external strategic factors. Some of the topics covered in Asociacion Chilena de Seguridad (ACHS) case study are - Strategic Management Strategies, Joint ventures, Personnel policies, Succession planning and Organizational Development.
Some of the macro environment factors that can be used to understand the Asociacion Chilena de Seguridad (ACHS) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models,
increasing commodity prices, technology disruption, etc
Introduction to SWOT Analysis of Asociacion Chilena de Seguridad (ACHS)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Asociacion Chilena de Seguridad (ACHS) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Achs Chilena, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Achs Chilena 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 Asociacion Chilena de Seguridad (ACHS) can be done for the following purposes –
1. Strategic planning using facts provided in Asociacion Chilena de Seguridad (ACHS) case study
2. Improving business portfolio management of Achs Chilena
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 Achs Chilena
Strengths Asociacion Chilena de Seguridad (ACHS) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Achs Chilena in Asociacion Chilena de Seguridad (ACHS) Harvard Business Review case study are -
Highly skilled collaborators
– Achs Chilena 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 Asociacion Chilena de Seguridad (ACHS) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Achs Chilena 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.
Sustainable margins compare to other players in Organizational Development industry
– Asociacion Chilena de Seguridad (ACHS) firm has clearly differentiated products in the market place. This has enabled Achs Chilena to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Achs Chilena to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Achs Chilena is one of the leading recruiters in the industry. Managers in the Asociacion Chilena de Seguridad (ACHS) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Achs Chilena is present in almost all the verticals within the industry. This has provided firm in Asociacion Chilena de Seguridad (ACHS) 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.
Organizational Resilience of Achs Chilena
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Achs Chilena does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Achs Chilena in the sector have low bargaining power. Asociacion Chilena de Seguridad (ACHS) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Achs Chilena to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Achs Chilena 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 Mladen Koljatic, Monica Silva 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.
Operational resilience
– The operational resilience strategy in the Asociacion Chilena de Seguridad (ACHS) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Achs Chilena in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Achs Chilena is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Achs Chilena 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 Asociacion Chilena de Seguridad (ACHS) - 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 Asociacion Chilena de Seguridad (ACHS) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Asociacion Chilena de Seguridad (ACHS) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Asociacion Chilena de Seguridad (ACHS), it seems that the employees of Achs Chilena 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.
Aligning sales with marketing
– It come across in the case study Asociacion Chilena de Seguridad (ACHS) 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 Asociacion Chilena de Seguridad (ACHS) can leverage the sales team experience to cultivate customer relationships as Achs Chilena is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Achs Chilena, firm in the HBR case study Asociacion Chilena de Seguridad (ACHS) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Achs Chilena products
– To increase the profitability and margins on the products, Achs Chilena needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Achs Chilena 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. Achs Chilena 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.
High cash cycle compare to competitors
Achs Chilena has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study Asociacion Chilena de Seguridad (ACHS) 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 Achs Chilena 's lucrative customers.
Interest costs
– Compare to the competition, Achs Chilena 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Asociacion Chilena de Seguridad (ACHS) 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 Achs Chilena has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Mladen Koljatic, Monica Silva suggests that, Achs Chilena 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.
Skills based hiring
– The stress on hiring functional specialists at Achs Chilena 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.
Opportunities Asociacion Chilena de Seguridad (ACHS) | 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 Asociacion Chilena de Seguridad (ACHS) are -
Buying journey improvements
– Achs Chilena can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Asociacion Chilena de Seguridad (ACHS) 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.
Better consumer reach
– The expansion of the 5G network will help Achs Chilena to increase its market reach. Achs Chilena 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.
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 Achs Chilena in the consumer business. Now Achs Chilena 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 Achs Chilena 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.
Developing new processes and practices
– Achs Chilena 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.
Learning at scale
– Online learning technologies has now opened space for Achs Chilena 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Achs Chilena can use these opportunities to build new business models that can help the communities that Achs Chilena operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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. Achs Chilena can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Achs Chilena 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Achs Chilena 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, Asociacion Chilena de Seguridad (ACHS), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Achs Chilena to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Achs Chilena to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Achs Chilena has opened avenues for new revenue streams for the organization in the industry. This can help Achs Chilena to build a more holistic ecosystem as suggested in the Asociacion Chilena de Seguridad (ACHS) case study. Achs Chilena can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Achs Chilena 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.
Threats Asociacion Chilena de Seguridad (ACHS) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Asociacion Chilena de Seguridad (ACHS) are -
High dependence on third party suppliers
– Achs Chilena 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 Asociacion Chilena de Seguridad (ACHS), Achs Chilena 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 Achs Chilena with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Achs Chilena
– 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 Achs Chilena.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Achs Chilena 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.
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. Achs Chilena will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology 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.
Shortening product life cycle
– it is one of the major threat that Achs Chilena is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Achs Chilena can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Achs Chilena has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Achs Chilena 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Achs Chilena 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 Asociacion Chilena de Seguridad (ACHS) .
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 Achs Chilena in the Organizational Development sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of Asociacion Chilena de Seguridad (ACHS) 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 Asociacion Chilena de Seguridad (ACHS) 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 Asociacion Chilena de Seguridad (ACHS) 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 Asociacion Chilena de Seguridad (ACHS) 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 Asociacion Chilena de Seguridad (ACHS) 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 Achs Chilena needs to make to build a sustainable competitive advantage.