Swot Analysis of "Cherkizovsky Group (B)" written by Lynn Sharp Paine, Harold F. Hogan Jr. includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cherkizovsky Supplements facing as an external strategic factors. Some of the topics covered in Cherkizovsky Group (B) case study are - Strategic Management Strategies, Competition, Economy, Emerging markets, Organizational structure, Social responsibility and Organizational Development.
Some of the macro environment factors that can be used to understand the Cherkizovsky Group (B) casestudy better are - – wage bills are increasing, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, technology disruption, there is increasing trade war between United States & China,
increasing energy prices, increasing commodity prices, etc
Introduction to SWOT Analysis of Cherkizovsky Group (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cherkizovsky Group (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cherkizovsky Supplements, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cherkizovsky Supplements 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 Cherkizovsky Group (B) can be done for the following purposes –
1. Strategic planning using facts provided in Cherkizovsky Group (B) case study
2. Improving business portfolio management of Cherkizovsky Supplements
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 Cherkizovsky Supplements
Strengths Cherkizovsky Group (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cherkizovsky Supplements in Cherkizovsky Group (B) Harvard Business Review case study are -
Diverse revenue streams
– Cherkizovsky Supplements is present in almost all the verticals within the industry. This has provided firm in Cherkizovsky Group (B) 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.
Learning organization
- Cherkizovsky Supplements 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 Cherkizovsky Supplements is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cherkizovsky Group (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Cherkizovsky Supplements in the sector have low bargaining power. Cherkizovsky Group (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cherkizovsky Supplements to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Cherkizovsky Supplements has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cherkizovsky Supplements 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.
Cross disciplinary teams
– Horizontal connected teams at the Cherkizovsky Supplements 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.
Innovation driven organization
– Cherkizovsky Supplements is one of the most innovative firm in sector. Manager in Cherkizovsky Group (B) 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
– Cherkizovsky Supplements has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cherkizovsky Group (B) 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.
Ability to recruit top talent
– Cherkizovsky Supplements is one of the leading recruiters in the industry. Managers in the Cherkizovsky Group (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Cherkizovsky Group (B) 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.
High brand equity
– Cherkizovsky Supplements has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cherkizovsky Supplements to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Organizational Development field
– Cherkizovsky Supplements 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 Cherkizovsky Supplements in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Cherkizovsky Supplements digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cherkizovsky Supplements has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Cherkizovsky Group (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cherkizovsky Group (B) are -
Slow to strategic competitive environment developments
– As Cherkizovsky Group (B) HBR case study mentions - Cherkizovsky Supplements 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.
Need for greater diversity
– Cherkizovsky Supplements 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.
Increasing silos among functional specialists
– The organizational structure of Cherkizovsky Supplements is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Cherkizovsky Supplements needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cherkizovsky Supplements to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cherkizovsky Group (B), in the dynamic environment Cherkizovsky Supplements has struggled to respond to the nimble upstart competition. Cherkizovsky Supplements 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, Cherkizovsky Supplements 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. Cherkizovsky Supplements 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cherkizovsky Group (B), is just above the industry average. Cherkizovsky Supplements needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cherkizovsky Group (B) 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 Cherkizovsky Supplements has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Cherkizovsky Group (B) 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 Cherkizovsky Supplements 's lucrative customers.
High cash cycle compare to competitors
Cherkizovsky Supplements 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.
Interest costs
– Compare to the competition, Cherkizovsky Supplements 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.
Skills based hiring
– The stress on hiring functional specialists at Cherkizovsky Supplements 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 Cherkizovsky Group (B) | 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 Cherkizovsky Group (B) are -
Using analytics as competitive advantage
– Cherkizovsky Supplements 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 Cherkizovsky Group (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cherkizovsky Supplements to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Cherkizovsky Supplements 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cherkizovsky Supplements can use these opportunities to build new business models that can help the communities that Cherkizovsky Supplements operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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. Cherkizovsky Supplements can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Cherkizovsky Supplements has opened avenues for new revenue streams for the organization in the industry. This can help Cherkizovsky Supplements to build a more holistic ecosystem as suggested in the Cherkizovsky Group (B) case study. Cherkizovsky Supplements can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Cherkizovsky Supplements 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.
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. Cherkizovsky Supplements can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Cherkizovsky Supplements 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.
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 Cherkizovsky Supplements 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cherkizovsky Supplements can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Cherkizovsky Supplements 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.
Buying journey improvements
– Cherkizovsky Supplements can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cherkizovsky Group (B) 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.
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 Cherkizovsky Supplements in the consumer business. Now Cherkizovsky Supplements can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Cherkizovsky Group (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cherkizovsky Group (B) are -
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 Cherkizovsky Supplements business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Cherkizovsky Supplements
– 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 Cherkizovsky Supplements.
Consumer confidence and its impact on Cherkizovsky Supplements 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cherkizovsky Supplements 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 Cherkizovsky Group (B) .
Technology acceleration in Forth Industrial Revolution
– Cherkizovsky Supplements has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Cherkizovsky Supplements 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.
Environmental challenges
– Cherkizovsky Supplements 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. Cherkizovsky Supplements can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Regulatory challenges
– Cherkizovsky Supplements 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.
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. Cherkizovsky Supplements needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cherkizovsky Supplements with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Cherkizovsky Supplements 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. Cherkizovsky Supplements can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Cherkizovsky Supplements.
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 Cherkizovsky Supplements in the Organizational Development sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Cherkizovsky Group (B) 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 Cherkizovsky Group (B) 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 Cherkizovsky Group (B) 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 Cherkizovsky Group (B) 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 Cherkizovsky Group (B) 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 Cherkizovsky Supplements needs to make to build a sustainable competitive advantage.