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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%,
increasing energy prices, there is increasing trade war between United States & China, 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 -
High brand equity
– Spaghetti Kolind has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Spaghetti Kolind to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Ability to lead change in Organizational Development field
– Spaghetti Kolind 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 Spaghetti Kolind in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
Highly skilled collaborators
– Spaghetti Kolind 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 Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Organizational Resilience of Spaghetti Kolind
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Spaghetti Kolind does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Spaghetti Kolind is one of the leading recruiters in the industry. Managers in the Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Spaghetti Kolind 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 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 -
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.
Need for greater diversity
– Spaghetti Kolind has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow 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.
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 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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 Spaghetti Kolind has relatively successful track record of launching new products.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization 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 Spaghetti Kolind 's lucrative customers.
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.
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.
High cash cycle compare to competitors
Spaghetti Kolind 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.
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 -
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.
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 Spaghetti Kolind to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. 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.
Leveraging digital technologies
– Spaghetti Kolind 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.
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. Spaghetti Kolind can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Creating value in data economy
– The success of analytics program of Spaghetti Kolind has opened avenues for new revenue streams for the organization in the industry. This can help Spaghetti Kolind to build a more holistic ecosystem as suggested in the Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization case study. Spaghetti Kolind can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Spaghetti Kolind 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 Spaghetti Kolind 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, Spaghetti Kolind 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, Revolution at Oticon A/S (B): Acquiring Change Competence in a "Spaghetti" Organization, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Spaghetti Kolind can use these opportunities to build new business models that can help the communities that Spaghetti Kolind operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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.
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.
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 -
Shortening product life cycle
– it is one of the major threat that Spaghetti Kolind is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Spaghetti Kolind with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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.
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.
High dependence on third party suppliers
– Spaghetti Kolind 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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Spaghetti Kolind business can come under increasing regulations regarding data privacy, data security, etc.
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.
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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