Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe
Traces the efforts of Patrick Rich, CEO of Alcan Europe, to bring the company into a stable, profitable situation after having lost $120 million in 1982. Focuses on a wide variety of issues, including setting objectives and strategies for the region, creating appropriate coordinating mechanisms, achieving the appropriate degree of independence and coordination among the subsidiaries, maintaining a climate of frugality and capital constraints, and finally, achieving an appropriate organizational structure. Two videotapes are available from the Audio-Visual Department for HBS instructors' use with this case.
Swot Analysis of "Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe" written by Daniel J. Isenberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alcan Patrick facing as an external strategic factors. Some of the topics covered in Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe case study are - Strategic Management Strategies, Leadership, Organizational culture, Organizational structure, Strategic planning and Organizational Development.
Some of the macro environment factors that can be used to understand the Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe casestudy better are - – increasing commodity prices, challanges to central banks by blockchain based private currencies, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alcan Patrick, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alcan Patrick 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe can be done for the following purposes –
1. Strategic planning using facts provided in Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe case study
2. Improving business portfolio management of Alcan Patrick
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 Alcan Patrick
Strengths Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alcan Patrick in Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe Harvard Business Review case study are -
Organizational Resilience of Alcan Patrick
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Alcan Patrick does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Alcan Patrick 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Alcan Patrick has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alcan Patrick to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Alcan Patrick is one of the most innovative firm in sector. Manager in Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Alcan Patrick in the sector have low bargaining power. Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alcan Patrick to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Alcan Patrick in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Alcan Patrick 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 Daniel J. Isenberg 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.
Learning organization
- Alcan Patrick 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 Alcan Patrick is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Organizational Development field
– Alcan Patrick 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 Alcan Patrick in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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
– Alcan Patrick is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Alcan Patrick 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe are -
Need for greater diversity
– Alcan Patrick has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Alcan Patrick 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Alcan Patrick is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Alcan Patrick has relatively successful track record of launching new products.
Lack of clear differentiation of Alcan Patrick products
– To increase the profitability and margins on the products, Alcan Patrick needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe, it seems that the employees of Alcan Patrick 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.
High cash cycle compare to competitors
Alcan Patrick 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.
Slow decision making process
– As mentioned earlier in the report, Alcan Patrick 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. Alcan Patrick 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.
Products dominated business model
– Even though Alcan Patrick has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Alcan Patrick is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Alcan Patrick needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Alcan Patrick to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Alcan Patrick 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.
Opportunities Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe | 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alcan Patrick can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Alcan Patrick 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. Alcan Patrick 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.
Loyalty marketing
– Alcan Patrick 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.
Manufacturing automation
– Alcan Patrick 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.
Building a culture of innovation
– managers at Alcan Patrick 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.
Better consumer reach
– The expansion of the 5G network will help Alcan Patrick to increase its market reach. Alcan Patrick 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.
Buying journey improvements
– Alcan Patrick can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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.
Learning at scale
– Online learning technologies has now opened space for Alcan Patrick 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.
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 Alcan Patrick 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.
Creating value in data economy
– The success of analytics program of Alcan Patrick has opened avenues for new revenue streams for the organization in the industry. This can help Alcan Patrick to build a more holistic ecosystem as suggested in the Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe case study. Alcan Patrick can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Alcan Patrick can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Alcan Patrick 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.
Using analytics as competitive advantage
– Alcan Patrick 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alcan Patrick to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Alcan Patrick.
Environmental challenges
– Alcan Patrick 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. Alcan Patrick can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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 Alcan Patrick
– 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 Alcan Patrick.
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 Alcan Patrick in the Organizational Development sector and impact the bottomline of the organization.
Consumer confidence and its impact on Alcan Patrick 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Alcan Patrick 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Alcan Patrick 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. Alcan Patrick needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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 Alcan Patrick business can come under increasing regulations regarding data privacy, data security, etc.
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. Alcan Patrick 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, Alcan Patrick 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe .
High dependence on third party suppliers
– Alcan Patrick 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.
Weighted SWOT Analysis of Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Turning Around Alcan Europe (B): Patrick Rich's Two Years as CEO-Europe 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 Alcan Patrick needs to make to build a sustainable competitive advantage.
