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 - – increasing transportation and logistics costs, increasing commodity prices, central banks are concerned over increasing inflation, increasing energy prices, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, technology disruption, 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 -
Organizational Resilience of Cherkizovsky Supplements
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cherkizovsky Supplements does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Cherkizovsky Supplements 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 Cherkizovsky Group (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Organizational Development industry
– Cherkizovsky Group (B) firm has clearly differentiated products in the market place. This has enabled Cherkizovsky Supplements to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Cherkizovsky Supplements to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
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.
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.
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.
Effective Research and Development (R&D)
– Cherkizovsky Supplements 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 Cherkizovsky Group (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Cherkizovsky Supplements 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.
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 -
No frontier risks strategy
– After analyzing the HBR case study Cherkizovsky Group (B), 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 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.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cherkizovsky Supplements needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Cherkizovsky Supplements products
– To increase the profitability and margins on the products, Cherkizovsky Supplements needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Cherkizovsky Supplements supply chain. Even after few cautionary changes mentioned in the HBR case study - Cherkizovsky Group (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cherkizovsky Supplements vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Cherkizovsky Supplements 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 - Cherkizovsky Group (B) should strive to include more intangible value offerings along with its core products and services.
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.
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.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cherkizovsky Supplements 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cherkizovsky Supplements is facing challenges because of the dominance of functional experts in the organization. Cherkizovsky Group (B) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cherkizovsky Supplements 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, Cherkizovsky Group (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Loyalty marketing
– Cherkizovsky Supplements 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.
Leveraging digital technologies
– Cherkizovsky Supplements 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cherkizovsky Supplements 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 Cherkizovsky Supplements to hire the very best people irrespective of their geographical location.
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.
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.
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 -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cherkizovsky Group (B), Cherkizovsky Supplements 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 .
High dependence on third party suppliers
– Cherkizovsky Supplements 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cherkizovsky Supplements 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.
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.
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.
Stagnating economy with rate increase
– Cherkizovsky Supplements can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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) .
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.
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.
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.
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.
