Revolution at Oticon A/S (A): Vision for a Change-Competent 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 (A): Vision for a Change-Competent Organization
From the mid-1980s, Oticon A/S, a Danish manufacturer of high-quality hearing aids, begins to experience significant losses and falls from its No. 1 market position to third position. A newly named CEO, Lars Kolind, initiates a significant cost reduction and product line rationalization program, which leads to a dramatic turnaround, restoring the company once again to profitability. Kolind, however, does not think that these changes have led to a sustainable competitive advantage and he further introduces a vision for Oticon A/S headquarters that would entail a fundamental restructuring and transformation of the organization. Management and employees revolt and refuse a planned move of headquarters. Should Kolind proceed with the proposed radial change, or has this recent turnaround been sufficient to restore Oticon to its No. 1 position? A 1994 and 1995 ECCH award winner.
Authors :: R. Morgan Gould, Michael Stanford, Kate Blackmon
Swot Analysis of "Revolution at Oticon A/S (A): Vision for a Change-Competent Organization" written by R. Morgan Gould, Michael Stanford, Kate Blackmon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oticon Kolind facing as an external strategic factors. Some of the topics covered in Revolution at Oticon A/S (A): Vision for a Change-Competent 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 (A): Vision for a Change-Competent Organization casestudy better are - – increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Revolution at Oticon A/S (A): Vision for a Change-Competent 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 (A): Vision for a Change-Competent Organization case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oticon Kolind, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oticon 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 (A): Vision for a Change-Competent Organization can be done for the following purposes –
1. Strategic planning using facts provided in Revolution at Oticon A/S (A): Vision for a Change-Competent Organization case study
2. Improving business portfolio management of Oticon 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 Oticon Kolind
Strengths Revolution at Oticon A/S (A): Vision for a Change-Competent Organization | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oticon Kolind in Revolution at Oticon A/S (A): Vision for a Change-Competent Organization Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Revolution at Oticon A/S (A): Vision for a Change-Competent 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.
Cross disciplinary teams
– Horizontal connected teams at the Oticon 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.
Sustainable margins compare to other players in Organizational Development industry
– Revolution at Oticon A/S (A): Vision for a Change-Competent Organization firm has clearly differentiated products in the market place. This has enabled Oticon Kolind to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Oticon Kolind to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Oticon 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 (A): Vision for a Change-Competent 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.
High brand equity
– Oticon Kolind has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oticon Kolind to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Oticon 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.
Diverse revenue streams
– Oticon Kolind is present in almost all the verticals within the industry. This has provided firm in Revolution at Oticon A/S (A): Vision for a Change-Competent 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.
Innovation driven organization
– Oticon Kolind is one of the most innovative firm in sector. Manager in Revolution at Oticon A/S (A): Vision for a Change-Competent Organization Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Oticon Kolind in the sector have low bargaining power. Revolution at Oticon A/S (A): Vision for a Change-Competent Organization has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oticon Kolind to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Oticon 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 Oticon Kolind is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Revolution at Oticon A/S (A): Vision for a Change-Competent Organization Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Oticon 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 (A): Vision for a Change-Competent Organization HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Oticon Kolind is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by R. Morgan Gould, Michael Stanford, Kate Blackmon can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Revolution at Oticon A/S (A): Vision for a Change-Competent Organization | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Revolution at Oticon A/S (A): Vision for a Change-Competent Organization are -
Capital Spending Reduction
– Even during the low interest decade, Oticon Kolind has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Oticon Kolind, firm in the HBR case study Revolution at Oticon A/S (A): Vision for a Change-Competent Organization needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Oticon 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Revolution at Oticon A/S (A): Vision for a Change-Competent 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 Oticon Kolind has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Revolution at Oticon A/S (A): Vision for a Change-Competent 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 Oticon Kolind 's lucrative customers.
High cash cycle compare to competitors
Oticon 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.
No frontier risks strategy
– After analyzing the HBR case study Revolution at Oticon A/S (A): Vision for a Change-Competent Organization, 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.
Interest costs
– Compare to the competition, Oticon 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 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 Oticon Kolind supply chain. Even after few cautionary changes mentioned in the HBR case study - Revolution at Oticon A/S (A): Vision for a Change-Competent Organization, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Oticon Kolind vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Oticon 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 (A): Vision for a Change-Competent 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.
Lack of clear differentiation of Oticon Kolind products
– To increase the profitability and margins on the products, Oticon Kolind needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Revolution at Oticon A/S (A): Vision for a Change-Competent 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 (A): Vision for a Change-Competent Organization are -
Leveraging digital technologies
– Oticon 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.
Building a culture of innovation
– managers at Oticon 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Oticon Kolind is facing challenges because of the dominance of functional experts in the organization. Revolution at Oticon A/S (A): Vision for a Change-Competent 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Oticon 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 (A): Vision for a Change-Competent 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.
Developing new processes and practices
– Oticon 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Oticon Kolind 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Oticon Kolind can use these opportunities to build new business models that can help the communities that Oticon Kolind operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oticon 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 Oticon Kolind to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Oticon 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 (A): Vision for a Change-Competent Organization - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Oticon Kolind to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Oticon 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. Oticon 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Oticon 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.
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 Oticon Kolind in the consumer business. Now Oticon Kolind can target international markets with far fewer capital restrictions requirements than the existing system.
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. Oticon Kolind can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Revolution at Oticon A/S (A): Vision for a Change-Competent 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 (A): Vision for a Change-Competent Organization are -
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 Oticon Kolind.
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 (A): Vision for a Change-Competent Organization, Oticon 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
– Oticon Kolind has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Oticon 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oticon 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 (A): Vision for a Change-Competent Organization .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Oticon Kolind with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Oticon Kolind needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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 Oticon Kolind in the Organizational Development sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Oticon 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.
Consumer confidence and its impact on Oticon Kolind demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Regulatory challenges
– Oticon 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.
Environmental challenges
– Oticon 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. Oticon Kolind can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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.
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. Oticon 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 (A): Vision for a Change-Competent 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 (A): Vision for a Change-Competent 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 (A): Vision for a Change-Competent 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 (A): Vision for a Change-Competent 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 (A): Vision for a Change-Competent 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 Oticon Kolind needs to make to build a sustainable competitive advantage.