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 - – increasing energy prices, increasing commodity prices, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
Successful track record of launching new products
– Hydraulics Sun has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hydraulics Sun has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Organizational Resilience of 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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Hydraulics Sun 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.
Learning organization
- Hydraulics Sun 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 Hydraulics Sun is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Hydraulics Sun is present in almost all the verticals within the industry. This has provided firm in Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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.
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.
Ability to lead change in Organizational Development field
– Hydraulics Sun 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 Hydraulics Sun in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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 -
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version 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 Hydraulics Sun 's lucrative customers.
Slow to strategic competitive environment developments
– As Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version HBR case study mentions - Hydraulics Sun takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version, it seems that the employees of Hydraulics Sun 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.
Increasing silos among functional specialists
– The organizational structure of Hydraulics Sun is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Hydraulics Sun needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hydraulics Sun to focus more on services rather than just following the product oriented approach.
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.
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 Hydraulics Sun supply chain. Even after few cautionary changes mentioned in the HBR case study - Sun Hydraulics: Leading in Tough Times (A) (Abridged), Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hydraulics Sun vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Hydraulics Sun 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.
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 -
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hydraulics Sun 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 Hydraulics Sun to hire the very best people irrespective of their geographical location.
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.
Manufacturing automation
– Hydraulics Sun 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.
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 Hydraulics Sun 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.
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.
Learning at scale
– Online learning technologies has now opened space for Hydraulics Sun 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.
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.
Leveraging digital technologies
– Hydraulics Sun 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.
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.
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.
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.
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.
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 -
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 .
Environmental challenges
– Hydraulics Sun 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. Hydraulics Sun can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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. Hydraulics Sun 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 Hydraulics Sun in the Organizational Development sector and impact the bottomline of the organization.
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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hydraulics Sun can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. 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.
Consumer confidence and its impact on Hydraulics Sun 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.
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.
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.
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.