Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version
Sun Hydraulics, 32-year-old global hydraulics engineering and manufacturing company headquartered in Sarasota, Florida; confronts tough choices due to the economic downturn in 2001. The company leadership debates how to maintain profitability and reduce labor costs without destroying the company's innovative culture, which is based on horizontal management and has no defined corporate hierarchy. This case includes an overview of the company's history, from its founding in 1970 to its IPO in 1997, and asks students to step into the shoes of Allen Carlson, Sun's president and CEO, to recommend specific cost-cutting actions.
Swot Analysis of "Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version" written by Linda A. Hill, Jennifer M. Suesse includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hydraulics Sun facing as an external strategic factors. Some of the topics covered in Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version case study are - Strategic Management Strategies, Downsizing, Economy, Innovation, Leadership, Managing people, Manufacturing, Organizational culture, Organizational structure and Organizational Development.
Some of the macro environment factors that can be used to understand the Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing commodity prices, increasing energy prices, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models,
geopolitical disruptions, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hydraulics Sun, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hydraulics Sun 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version case study
2. Improving business portfolio management of Hydraulics Sun
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 Hydraulics Sun
Strengths Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hydraulics Sun in Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version Harvard Business Review case study are -
Highly skilled collaborators
– Hydraulics Sun 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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.
Sustainable margins compare to other players in Organizational Development industry
– Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version firm has clearly differentiated products in the market place. This has enabled Hydraulics Sun to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Hydraulics Sun to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Hydraulics Sun is one of the leading recruiters in the industry. Managers in the Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Hydraulics Sun is one of the most innovative firm in sector. Manager in Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Hydraulics Sun 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.
High brand equity
– Hydraulics Sun has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hydraulics Sun to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Hydraulics Sun in the sector have low bargaining power. Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hydraulics Sun to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Hydraulics Sun 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Hydraulics Sun has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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.
Strong track record of project management
– Hydraulics Sun is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Hydraulics Sun
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hydraulics Sun does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version are -
Skills based hiring
– The stress on hiring functional specialists at Hydraulics Sun 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.
Aligning sales with marketing
– It come across in the case study Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version can leverage the sales team experience to cultivate customer relationships as Hydraulics Sun is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version, is just above the industry average. Hydraulics Sun 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version, in the dynamic environment Hydraulics Sun has struggled to respond to the nimble upstart competition. Hydraulics Sun has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Hydraulics Sun 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hydraulics Sun 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.
No frontier risks strategy
– After analyzing the HBR case study Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version, 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.
Slow decision making process
– As mentioned earlier in the report, Hydraulics Sun 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. Hydraulics Sun 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Linda A. Hill, Jennifer M. Suesse suggests that, Hydraulics Sun 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.
Lack of clear differentiation of Hydraulics Sun products
– To increase the profitability and margins on the products, Hydraulics Sun needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hydraulics Sun is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version | 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version are -
Creating value in data economy
– The success of analytics program of Hydraulics Sun has opened avenues for new revenue streams for the organization in the industry. This can help Hydraulics Sun to build a more holistic ecosystem as suggested in the Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version case study. Hydraulics Sun can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Hydraulics Sun can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Hydraulics Sun 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. Hydraulics Sun 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hydraulics Sun 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.
Developing new processes and practices
– Hydraulics Sun 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.
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. Hydraulics Sun can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hydraulics Sun can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hydraulics Sun is facing challenges because of the dominance of functional experts in the organization. Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hydraulics Sun 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.
Loyalty marketing
– Hydraulics Sun 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.
Building a culture of innovation
– managers at Hydraulics Sun 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hydraulics Sun can use these opportunities to build new business models that can help the communities that Hydraulics Sun operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hydraulics Sun 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, Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version are -
High dependence on third party suppliers
– Hydraulics Sun 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.
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 Hydraulics Sun.
Regulatory challenges
– Hydraulics Sun 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.
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 Hydraulics Sun in the Organizational Development sector and impact the bottomline of the organization.
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. Hydraulics Sun 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.
Shortening product life cycle
– it is one of the major threat that Hydraulics Sun is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Hydraulics Sun 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version, Hydraulics Sun 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 .
Increasing wage structure of Hydraulics Sun
– 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 Hydraulics Sun.
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.
Technology acceleration in Forth Industrial Revolution
– Hydraulics Sun has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Hydraulics Sun 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hydraulics Sun 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 Hydraulics Sun with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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 Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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 Hydraulics Sun needs to make to build a sustainable competitive advantage.