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 commodity prices, increasing energy prices, there is backlash against globalization, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
Ability to lead change in Organizational Development field
– Oticon 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 Oticon Kolind in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Strong track record of project management
– Oticon 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.
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.
Organizational Resilience of Oticon Kolind
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Oticon Kolind does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Training and development
– Oticon 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 (A): Vision for a Change-Competent 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.
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.
Superior customer experience
– The customer experience strategy of Oticon Kolind in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Oticon Kolind has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oticon 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.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Oticon Kolind 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Revolution at Oticon A/S (A): Vision for a Change-Competent Organization, is just above the industry average. Oticon 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.
Aligning sales with marketing
– It come across in the case study Revolution at Oticon A/S (A): Vision for a Change-Competent Organization that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Revolution at Oticon A/S (A): Vision for a Change-Competent Organization can leverage the sales team experience to cultivate customer relationships as Oticon Kolind is planning to shift buying processes online.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, R. Morgan Gould, Michael Stanford, Kate Blackmon suggests that, Oticon 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.
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.
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.
Need for greater diversity
– Oticon 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.
Increasing silos among functional specialists
– The organizational structure of Oticon Kolind is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Oticon Kolind needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oticon Kolind to focus more on services rather than just following the product oriented approach.
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.
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 -
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Oticon Kolind to increase its market reach. Oticon 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.
Manufacturing automation
– Oticon 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.
Creating value in data economy
– The success of analytics program of Oticon Kolind has opened avenues for new revenue streams for the organization in the industry. This can help Oticon Kolind to build a more holistic ecosystem as suggested in the Revolution at Oticon A/S (A): Vision for a Change-Competent Organization case study. Oticon Kolind can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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.
Buying journey improvements
– Oticon Kolind can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Revolution at Oticon A/S (A): Vision for a Change-Competent 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.
Loyalty marketing
– Oticon 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.
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.
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.
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.
Stagnating economy with rate increase
– Oticon 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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Oticon 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 Oticon Kolind.
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.
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.
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.
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 Oticon Kolind business can come under increasing regulations regarding data privacy, data security, 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 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 .
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.
