The manager of customer service and operations at a branch of financial services institution is considering his options following the third cash shortage, totalling almost $5,000, within a two-month period. His career and anticipated promotion depended on effectively handling this situation.
Swot Analysis of "Erik Hanssen" written by James A. Erskine, David McKay includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hanssen Totalling facing as an external strategic factors. Some of the topics covered in Erik Hanssen case study are - Strategic Management Strategies, Leadership development, Motivating people and Organizational Development.
Some of the macro environment factors that can be used to understand the Erik Hanssen casestudy better are - – talent flight as more people leaving formal jobs, increasing energy prices, wage bills are increasing, technology disruption, there is increasing trade war between United States & China, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Erik Hanssen case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hanssen Totalling, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hanssen Totalling 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 Erik Hanssen can be done for the following purposes –
1. Strategic planning using facts provided in Erik Hanssen case study
2. Improving business portfolio management of Hanssen Totalling
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 Hanssen Totalling
Strengths Erik Hanssen | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hanssen Totalling in Erik Hanssen Harvard Business Review case study are -
Analytics focus
– Hanssen Totalling 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 James A. Erskine, David McKay 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.
Organizational Resilience of Hanssen Totalling
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hanssen Totalling does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Organizational Development field
– Hanssen Totalling 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 Hanssen Totalling in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Hanssen Totalling in the sector have low bargaining power. Erik Hanssen has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hanssen Totalling to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Hanssen Totalling has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hanssen Totalling 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.
Innovation driven organization
– Hanssen Totalling is one of the most innovative firm in sector. Manager in Erik Hanssen Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Hanssen Totalling has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Erik Hanssen Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Hanssen Totalling 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 Hanssen Totalling is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Erik Hanssen Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Hanssen Totalling has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hanssen Totalling to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Hanssen Totalling is present in almost all the verticals within the industry. This has provided firm in Erik Hanssen 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
– Hanssen Totalling is one of the leading recruiters in the industry. Managers in the Erik Hanssen are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Organizational Development industry
– Erik Hanssen firm has clearly differentiated products in the market place. This has enabled Hanssen Totalling to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Hanssen Totalling to invest into research and development (R&D) and innovation.
Weaknesses Erik Hanssen | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Erik Hanssen are -
No frontier risks strategy
– After analyzing the HBR case study Erik Hanssen, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hanssen Totalling is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Erik Hanssen can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Hanssen Totalling 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 - Erik Hanssen 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 Erik Hanssen, it seems that the employees of Hanssen Totalling 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.
Slow to strategic competitive environment developments
– As Erik Hanssen HBR case study mentions - Hanssen Totalling 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.
High cash cycle compare to competitors
Hanssen Totalling 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.
Low market penetration in new markets
– Outside its home market of Hanssen Totalling, firm in the HBR case study Erik Hanssen needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Hanssen Totalling products
– To increase the profitability and margins on the products, Hanssen Totalling needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Hanssen Totalling 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Erik Hanssen, in the dynamic environment Hanssen Totalling has struggled to respond to the nimble upstart competition. Hanssen Totalling has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Erik Hanssen 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 Hanssen Totalling 's lucrative customers.
Opportunities Erik Hanssen | 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 Erik Hanssen are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hanssen Totalling can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Hanssen Totalling to increase its market reach. Hanssen Totalling 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.
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. Hanssen Totalling can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Hanssen Totalling can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hanssen Totalling 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 Hanssen Totalling to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hanssen Totalling 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, Erik Hanssen, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Hanssen Totalling 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.
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 Hanssen Totalling in the consumer business. Now Hanssen Totalling can target international markets with far fewer capital restrictions requirements than the existing system.
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. Hanssen Totalling 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. Hanssen Totalling 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hanssen Totalling 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.
Leveraging digital technologies
– Hanssen Totalling 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.
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 Hanssen Totalling 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.
Creating value in data economy
– The success of analytics program of Hanssen Totalling has opened avenues for new revenue streams for the organization in the industry. This can help Hanssen Totalling to build a more holistic ecosystem as suggested in the Erik Hanssen case study. Hanssen Totalling can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Erik Hanssen External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Erik Hanssen are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hanssen Totalling 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 Hanssen Totalling business can come under increasing regulations regarding data privacy, data security, etc.
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. Hanssen Totalling 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hanssen Totalling with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Erik Hanssen, Hanssen Totalling 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 .
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. Hanssen Totalling can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hanssen Totalling 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 Erik Hanssen .
Environmental challenges
– Hanssen Totalling 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. Hanssen Totalling can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Consumer confidence and its impact on Hanssen Totalling 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.
Regulatory challenges
– Hanssen Totalling 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.
Increasing wage structure of Hanssen Totalling
– 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 Hanssen Totalling.
Shortening product life cycle
– it is one of the major threat that Hanssen Totalling is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Hanssen Totalling has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Hanssen Totalling 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.
Weighted SWOT Analysis of Erik Hanssen 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 Erik Hanssen 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 Erik Hanssen 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 Erik Hanssen 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 Erik Hanssen 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 Hanssen Totalling needs to make to build a sustainable competitive advantage.
