Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization
In 1990, Lars Kolind decides to abandon his plan to move Oticon A/S headquarters, but insists on the pursuit of his vision for what he now calls the spaghetti organization--so named because of its relative lack of structure. Shortly after implementation, the company suffers further financial losses. A new managing director, brought in by Kolind, begins to address the financial dynamics of Oticon A/S. Within six months, profitability is restored, and by 1993, the company enjoys its greatest profit since its founding in 1904. Has Kolind achieved the competitive advantage he sought with this new organization? Can the spectacular financial success be attributed to the spaghetti organization? How can the new organization be sustained in the years to come? A 1994 EFMD award winner.
Swot Analysis of "Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization" written by R. Morgan Gould, Michael Stanford includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Spaghetti Kolind facing as an external strategic factors. Some of the topics covered in Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization case study are - Strategic Management Strategies, Competitive strategy, Manufacturing, Motivating people, Organizational structure, Reorganization and Organizational Development.
Some of the macro environment factors that can be used to understand the Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, central banks are concerned over increasing inflation, increasing commodity prices, supply chains are disrupted by pandemic , there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, geopolitical disruptions, etc
Introduction to SWOT Analysis of Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Spaghetti Kolind, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Spaghetti Kolind 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization can be done for the following purposes –
1. Strategic planning using facts provided in Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization case study
2. Improving business portfolio management of Spaghetti Kolind
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 Spaghetti Kolind
Strengths Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Spaghetti Kolind in Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization Harvard Business Review case study are -
Training and development
– Spaghetti Kolind has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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.
Cross disciplinary teams
– Horizontal connected teams at the Spaghetti Kolind 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.
Learning organization
- Spaghetti Kolind 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 Spaghetti Kolind is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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.
Strong track record of project management
– Spaghetti Kolind is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Organizational Development industry
– Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization firm has clearly differentiated products in the market place. This has enabled Spaghetti Kolind to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Spaghetti Kolind to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Spaghetti Kolind is present in almost all the verticals within the industry. This has provided firm in Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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.
Successful track record of launching new products
– Spaghetti Kolind has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Spaghetti Kolind 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.
Effective Research and Development (R&D)
– Spaghetti Kolind 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Spaghetti Kolind in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Spaghetti Kolind digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Spaghetti Kolind 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.
Low bargaining power of suppliers
– Suppliers of Spaghetti Kolind in the sector have low bargaining power. Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Spaghetti Kolind to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Spaghetti Kolind is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Spaghetti Kolind 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.
Low market penetration in new markets
– Outside its home market of Spaghetti Kolind, firm in the HBR case study Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, R. Morgan Gould, Michael Stanford suggests that, Spaghetti Kolind 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization, in the dynamic environment Spaghetti Kolind has struggled to respond to the nimble upstart competition. Spaghetti Kolind has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization, is just above the industry average. Spaghetti Kolind 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.
Slow decision making process
– As mentioned earlier in the report, Spaghetti Kolind 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. Spaghetti Kolind 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.
Increasing silos among functional specialists
– The organizational structure of Spaghetti Kolind is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Spaghetti Kolind needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Spaghetti Kolind to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Spaghetti Kolind 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization, it seems that the employees of Spaghetti Kolind 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization HBR case study mentions - Spaghetti Kolind 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization | 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization are -
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. Spaghetti Kolind 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. Spaghetti Kolind 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.
Manufacturing automation
– Spaghetti Kolind 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.
Using analytics as competitive advantage
– Spaghetti Kolind 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Spaghetti Kolind 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
– Spaghetti Kolind 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.
Buying journey improvements
– Spaghetti Kolind can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Spaghetti Kolind is facing challenges because of the dominance of functional experts in the organization. Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Spaghetti Kolind 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 Spaghetti Kolind 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.
Building a culture of innovation
– managers at Spaghetti Kolind 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Spaghetti Kolind 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.
Better consumer reach
– The expansion of the 5G network will help Spaghetti Kolind to increase its market reach. Spaghetti Kolind 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.
Loyalty marketing
– Spaghetti Kolind 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.
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. Spaghetti Kolind can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Spaghetti Kolind with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Spaghetti Kolind 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. Spaghetti Kolind can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Regulatory challenges
– Spaghetti Kolind 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization, Spaghetti Kolind 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 .
Technology acceleration in Forth Industrial Revolution
– Spaghetti Kolind has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Spaghetti Kolind 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.
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 Spaghetti Kolind in the Organizational Development sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Spaghetti Kolind 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.
Stagnating economy with rate increase
– Spaghetti Kolind 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Spaghetti Kolind 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization .
Increasing wage structure of Spaghetti Kolind
– 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 Spaghetti Kolind.
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 Spaghetti Kolind.
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. Spaghetti Kolind can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Spaghetti Kolind 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.
Weighted SWOT Analysis of Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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 Spaghetti Kolind needs to make to build a sustainable competitive advantage.
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