Case Study Description of Progressive Corp.'s Divisionalization Decision (A)
Describes a company that is considering whether to establish an experimental division as a relatively independent profit center under a general manager. Data relevant to this decision include the company's strategy, markets, products, current structure, size, and the perceptions and interests of individual managers. Illustrates how both objective and subjective factors influence organizational design decisions.
Swot Analysis of "Progressive Corp.'s Divisionalization Decision (A)" written by Robert G. Eccles includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Divisionalization Subjective facing as an external strategic factors. Some of the topics covered in Progressive Corp.'s Divisionalization Decision (A) case study are - Strategic Management Strategies, Data, Decision making, Financial management, Organizational structure and Organizational Development.
Some of the macro environment factors that can be used to understand the Progressive Corp.'s Divisionalization Decision (A) casestudy better are - – geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, there is backlash against globalization, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Progressive Corp.'s Divisionalization Decision (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Progressive Corp.'s Divisionalization Decision (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Divisionalization Subjective, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Divisionalization Subjective 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 Progressive Corp.'s Divisionalization Decision (A) can be done for the following purposes –
1. Strategic planning using facts provided in Progressive Corp.'s Divisionalization Decision (A) case study
2. Improving business portfolio management of Divisionalization Subjective
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 Divisionalization Subjective
Strengths Progressive Corp.'s Divisionalization Decision (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Divisionalization Subjective in Progressive Corp.'s Divisionalization Decision (A) Harvard Business Review case study are -
Ability to lead change in Organizational Development field
– Divisionalization Subjective 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 Divisionalization Subjective in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Divisionalization Subjective 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 Divisionalization Subjective is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Progressive Corp.'s Divisionalization Decision (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Divisionalization Subjective 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 Progressive Corp.'s Divisionalization Decision (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Divisionalization Subjective is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Divisionalization Subjective in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Divisionalization Subjective is present in almost all the verticals within the industry. This has provided firm in Progressive Corp.'s Divisionalization Decision (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– Divisionalization Subjective is one of the leading recruiters in the industry. Managers in the Progressive Corp.'s Divisionalization Decision (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.
Cross disciplinary teams
– Horizontal connected teams at the Divisionalization Subjective 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.
Organizational Resilience of Divisionalization Subjective
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Divisionalization Subjective 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 Divisionalization Subjective in the sector have low bargaining power. Progressive Corp.'s Divisionalization Decision (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Divisionalization Subjective to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Divisionalization Subjective has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Divisionalization Subjective to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Divisionalization Subjective 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 Progressive Corp.'s Divisionalization Decision (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Progressive Corp.'s Divisionalization Decision (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Progressive Corp.'s Divisionalization Decision (A) are -
Lack of clear differentiation of Divisionalization Subjective products
– To increase the profitability and margins on the products, Divisionalization Subjective needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Progressive Corp.'s Divisionalization Decision (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Divisionalization Subjective 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Divisionalization Subjective 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Divisionalization Subjective is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Progressive Corp.'s Divisionalization Decision (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.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert G. Eccles suggests that, Divisionalization Subjective 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.
No frontier risks strategy
– After analyzing the HBR case study Progressive Corp.'s Divisionalization Decision (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.
High cash cycle compare to competitors
Divisionalization Subjective 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Progressive Corp.'s Divisionalization Decision (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 Divisionalization Subjective 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 Divisionalization Subjective supply chain. Even after few cautionary changes mentioned in the HBR case study - Progressive Corp.'s Divisionalization Decision (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Divisionalization Subjective vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Divisionalization Subjective 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.
Slow to strategic competitive environment developments
– As Progressive Corp.'s Divisionalization Decision (A) HBR case study mentions - Divisionalization Subjective 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.
Opportunities Progressive Corp.'s Divisionalization Decision (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 Progressive Corp.'s Divisionalization Decision (A) are -
Creating value in data economy
– The success of analytics program of Divisionalization Subjective has opened avenues for new revenue streams for the organization in the industry. This can help Divisionalization Subjective to build a more holistic ecosystem as suggested in the Progressive Corp.'s Divisionalization Decision (A) case study. Divisionalization Subjective can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Divisionalization Subjective 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Divisionalization Subjective can use these opportunities to build new business models that can help the communities that Divisionalization Subjective operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Developing new processes and practices
– Divisionalization Subjective 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.
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 Divisionalization Subjective 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.
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. Divisionalization Subjective can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Divisionalization Subjective 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. Divisionalization Subjective can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Divisionalization Subjective can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Divisionalization Subjective 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, Progressive Corp.'s Divisionalization Decision (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Divisionalization Subjective 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
– Divisionalization Subjective 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 Progressive Corp.'s Divisionalization Decision (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Divisionalization Subjective to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Divisionalization Subjective 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.
Threats Progressive Corp.'s Divisionalization Decision (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Progressive Corp.'s Divisionalization Decision (A) are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Progressive Corp.'s Divisionalization Decision (A), Divisionalization Subjective 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, Divisionalization Subjective 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 Progressive Corp.'s Divisionalization Decision (A) .
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 Divisionalization Subjective business can come under increasing regulations regarding data privacy, data security, etc.
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.
Consumer confidence and its impact on Divisionalization Subjective 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.
Shortening product life cycle
– it is one of the major threat that Divisionalization Subjective is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Divisionalization Subjective 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 Divisionalization Subjective
– 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 Divisionalization Subjective.
Regulatory challenges
– Divisionalization Subjective 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 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.
Environmental challenges
– Divisionalization Subjective 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. Divisionalization Subjective can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Technology acceleration in Forth Industrial Revolution
– Divisionalization Subjective has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Divisionalization Subjective 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
– Divisionalization Subjective 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 Progressive Corp.'s Divisionalization Decision (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 Progressive Corp.'s Divisionalization Decision (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 Progressive Corp.'s Divisionalization Decision (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 Progressive Corp.'s Divisionalization Decision (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 Progressive Corp.'s Divisionalization Decision (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 Divisionalization Subjective needs to make to build a sustainable competitive advantage.
