Sonoco Products Co. (A): Building a World-Class HR Organization SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sonoco Products Co. (A): Building a World-Class HR Organization
Describes the steps the vice-president of human resources takes in revamping an HR function that was noncooperative and, at times, competitive and introducing the company to the notion of HR as a strategic business partner. Explores changes made to the company's compensation, performance management, and succession planning processes. Teaching Purpose: To allow students to think strategically about reorganizing the human resources department to support business strategy and serve as a business partner.
Authors :: Boris Groysberg, David A. Thomas, Cate Reavis
Swot Analysis of "Sonoco Products Co. (A): Building a World-Class HR Organization" written by Boris Groysberg, David A. Thomas, Cate Reavis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hr Noncooperative facing as an external strategic factors. Some of the topics covered in Sonoco Products Co. (A): Building a World-Class HR Organization case study are - Strategic Management Strategies, Compensation, Human resource management, Marketing, Organizational structure, Performance measurement, Strategy execution, Succession planning and Organizational Development.
Some of the macro environment factors that can be used to understand the Sonoco Products Co. (A): Building a World-Class HR Organization casestudy better are - – supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China,
central banks are concerned over increasing inflation, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Sonoco Products Co. (A): Building a World-Class HR Organization
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sonoco Products Co. (A): Building a World-Class HR Organization case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hr Noncooperative, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hr Noncooperative 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 Sonoco Products Co. (A): Building a World-Class HR Organization can be done for the following purposes –
1. Strategic planning using facts provided in Sonoco Products Co. (A): Building a World-Class HR Organization case study
2. Improving business portfolio management of Hr Noncooperative
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 Hr Noncooperative
Strengths Sonoco Products Co. (A): Building a World-Class HR Organization | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hr Noncooperative in Sonoco Products Co. (A): Building a World-Class HR Organization Harvard Business Review case study are -
Analytics focus
– Hr Noncooperative 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 Boris Groysberg, David A. Thomas, Cate Reavis 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.
High switching costs
– The high switching costs that Hr Noncooperative 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.
Highly skilled collaborators
– Hr Noncooperative 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 Sonoco Products Co. (A): Building a World-Class HR Organization HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Hr Noncooperative is one of the most innovative firm in sector. Manager in Sonoco Products Co. (A): Building a World-Class HR Organization Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Hr Noncooperative digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hr Noncooperative has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Organizational Development industry
– Sonoco Products Co. (A): Building a World-Class HR Organization firm has clearly differentiated products in the market place. This has enabled Hr Noncooperative to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Hr Noncooperative to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Hr Noncooperative in the sector have low bargaining power. Sonoco Products Co. (A): Building a World-Class HR Organization has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hr Noncooperative to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Hr Noncooperative 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 Hr Noncooperative is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sonoco Products Co. (A): Building a World-Class HR Organization Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Hr Noncooperative has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hr Noncooperative to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Hr Noncooperative
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hr Noncooperative does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Hr Noncooperative has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sonoco Products Co. (A): Building a World-Class HR 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.
Diverse revenue streams
– Hr Noncooperative is present in almost all the verticals within the industry. This has provided firm in Sonoco Products Co. (A): Building a World-Class HR 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.
Weaknesses Sonoco Products Co. (A): Building a World-Class HR Organization | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sonoco Products Co. (A): Building a World-Class HR Organization are -
Increasing silos among functional specialists
– The organizational structure of Hr Noncooperative is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Hr Noncooperative needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hr Noncooperative to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Hr Noncooperative has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sonoco Products Co. (A): Building a World-Class HR Organization, is just above the industry average. Hr Noncooperative 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hr Noncooperative 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.
Aligning sales with marketing
– It come across in the case study Sonoco Products Co. (A): Building a World-Class HR 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 Sonoco Products Co. (A): Building a World-Class HR Organization can leverage the sales team experience to cultivate customer relationships as Hr Noncooperative is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Boris Groysberg, David A. Thomas, Cate Reavis suggests that, Hr Noncooperative 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.
Low market penetration in new markets
– Outside its home market of Hr Noncooperative, firm in the HBR case study Sonoco Products Co. (A): Building a World-Class HR Organization needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Hr Noncooperative 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sonoco Products Co. (A): Building a World-Class HR Organization, it seems that the employees of Hr Noncooperative 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.
Slow decision making process
– As mentioned earlier in the report, Hr Noncooperative 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. Hr Noncooperative 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.
Capital Spending Reduction
– Even during the low interest decade, Hr Noncooperative 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.
Opportunities Sonoco Products Co. (A): Building a World-Class HR 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 Sonoco Products Co. (A): Building a World-Class HR Organization are -
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 Hr Noncooperative in the consumer business. Now Hr Noncooperative can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hr Noncooperative 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.
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 Hr Noncooperative 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.
Developing new processes and practices
– Hr Noncooperative 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.
Manufacturing automation
– Hr Noncooperative 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.
Better consumer reach
– The expansion of the 5G network will help Hr Noncooperative to increase its market reach. Hr Noncooperative 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
– Hr Noncooperative can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sonoco Products Co. (A): Building a World-Class HR 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
– Hr Noncooperative 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hr Noncooperative is facing challenges because of the dominance of functional experts in the organization. Sonoco Products Co. (A): Building a World-Class HR 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.
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. Hr Noncooperative can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hr Noncooperative 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.
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. Hr Noncooperative can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Hr Noncooperative 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 Sonoco Products Co. (A): Building a World-Class HR Organization - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hr Noncooperative to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Sonoco Products Co. (A): Building a World-Class HR Organization External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sonoco Products Co. (A): Building a World-Class HR Organization are -
Regulatory challenges
– Hr Noncooperative 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sonoco Products Co. (A): Building a World-Class HR Organization, Hr Noncooperative may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Technology 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hr Noncooperative 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 Sonoco Products Co. (A): Building a World-Class HR Organization .
Increasing wage structure of Hr Noncooperative
– 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 Hr Noncooperative.
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 Hr Noncooperative.
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. Hr Noncooperative needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hr Noncooperative 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 Hr Noncooperative in the Organizational Development sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Hr Noncooperative is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Hr Noncooperative 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.
Technology acceleration in Forth Industrial Revolution
– Hr Noncooperative has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Hr Noncooperative 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.
Weighted SWOT Analysis of Sonoco Products Co. (A): Building a World-Class HR 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 Sonoco Products Co. (A): Building a World-Class HR 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 Sonoco Products Co. (A): Building a World-Class HR 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 Sonoco Products Co. (A): Building a World-Class HR 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 Sonoco Products Co. (A): Building a World-Class HR 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 Hr Noncooperative needs to make to build a sustainable competitive advantage.