Managing Talent at Bertelsmann AG (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Managing Talent at Bertelsmann AG (A)
Bertelsmann's EVP HR Immanuel Hermreck and his team were focused on four key HR issues. Three of these were somewhat discreet: improving Bertelsmann's employer brand; managing Bertelsmann talent across the firm's decentralized businesses; and ensuring early identification and appropriate development of Bertelsmann's top 100 high potential managers (hi-pos) to better seed the company's future top management. The fourth issue-recruitment and retention-played an integral role across all three challenges and had to be strengthened and made consistent across the firm, not an easy prospect given Bertelsmann's highly decentralized structure. Hermreck knew navigating these issues would pose significant challenges, but getting them right was critical to Bertelsmann's competitive advantage and survival as a robust media company. He had some good results in from his early efforts, but as he looked forward, what should his action plan set out to do?
Authors :: Boris Groysberg, Nitin Nohria, Mark C. Maletz, Kerry Herman
Swot Analysis of "Managing Talent at Bertelsmann AG (A)" written by Boris Groysberg, Nitin Nohria, Mark C. Maletz, Kerry Herman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bertelsmann's Hermreck facing as an external strategic factors. Some of the topics covered in Managing Talent at Bertelsmann AG (A) case study are - Strategic Management Strategies, Diversity, Strategy, Talent management and Organizational Development.
Some of the macro environment factors that can be used to understand the Managing Talent at Bertelsmann AG (A) casestudy better are - – increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, wage bills are increasing, increasing commodity prices, technology disruption, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Managing Talent at Bertelsmann AG (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Managing Talent at Bertelsmann AG (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bertelsmann's Hermreck, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bertelsmann's Hermreck 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 Managing Talent at Bertelsmann AG (A) can be done for the following purposes –
1. Strategic planning using facts provided in Managing Talent at Bertelsmann AG (A) case study
2. Improving business portfolio management of Bertelsmann's Hermreck
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 Bertelsmann's Hermreck
Strengths Managing Talent at Bertelsmann AG (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bertelsmann's Hermreck in Managing Talent at Bertelsmann AG (A) Harvard Business Review case study are -
Innovation driven organization
– Bertelsmann's Hermreck is one of the most innovative firm in sector. Manager in Managing Talent at Bertelsmann AG (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Bertelsmann's Hermreck
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bertelsmann's Hermreck does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Bertelsmann's Hermreck 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 Bertelsmann's Hermreck is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Managing Talent at Bertelsmann AG (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Bertelsmann's Hermreck has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Managing Talent at Bertelsmann AG (A) 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.
Operational resilience
– The operational resilience strategy in the Managing Talent at Bertelsmann AG (A) 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.
High brand equity
– Bertelsmann's Hermreck has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bertelsmann's Hermreck to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Bertelsmann's Hermreck 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
– Bertelsmann's Hermreck 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 Bertelsmann's Hermreck in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Bertelsmann's Hermreck has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bertelsmann's Hermreck 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.
Low bargaining power of suppliers
– Suppliers of Bertelsmann's Hermreck in the sector have low bargaining power. Managing Talent at Bertelsmann AG (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bertelsmann's Hermreck to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Bertelsmann's Hermreck 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 Managing Talent at Bertelsmann AG (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Bertelsmann's Hermreck is one of the leading recruiters in the industry. Managers in the Managing Talent at Bertelsmann AG (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Managing Talent at Bertelsmann AG (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Managing Talent at Bertelsmann AG (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Managing Talent at Bertelsmann AG (A), it seems that the employees of Bertelsmann's Hermreck 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.
Products dominated business model
– Even though Bertelsmann's Hermreck 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 - Managing Talent at Bertelsmann AG (A) should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Bertelsmann's Hermreck 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.
Capital Spending Reduction
– Even during the low interest decade, Bertelsmann's Hermreck has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Managing Talent at Bertelsmann AG (A) 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 Bertelsmann's Hermreck 's lucrative customers.
Lack of clear differentiation of Bertelsmann's Hermreck products
– To increase the profitability and margins on the products, Bertelsmann's Hermreck needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Boris Groysberg, Nitin Nohria, Mark C. Maletz, Kerry Herman suggests that, Bertelsmann's Hermreck is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High 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 Bertelsmann's Hermreck supply chain. Even after few cautionary changes mentioned in the HBR case study - Managing Talent at Bertelsmann AG (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bertelsmann's Hermreck vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Managing Talent at Bertelsmann AG (A), in the dynamic environment Bertelsmann's Hermreck has struggled to respond to the nimble upstart competition. Bertelsmann's Hermreck has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Bertelsmann's Hermreck 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.
No frontier risks strategy
– After analyzing the HBR case study Managing Talent at Bertelsmann AG (A), 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.
Opportunities Managing Talent at Bertelsmann AG (A) | 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 Managing Talent at Bertelsmann AG (A) are -
Leveraging digital technologies
– Bertelsmann's Hermreck 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.
Manufacturing automation
– Bertelsmann's Hermreck 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.
Developing new processes and practices
– Bertelsmann's Hermreck 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bertelsmann's Hermreck can use these opportunities to build new business models that can help the communities that Bertelsmann's Hermreck operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bertelsmann's Hermreck 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bertelsmann's Hermreck can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Bertelsmann's Hermreck 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 Managing Talent at Bertelsmann AG (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bertelsmann's Hermreck to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bertelsmann's Hermreck 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, Managing Talent at Bertelsmann AG (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Bertelsmann's Hermreck 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.
Buying journey improvements
– Bertelsmann's Hermreck can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Managing Talent at Bertelsmann AG (A) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bertelsmann's Hermreck is facing challenges because of the dominance of functional experts in the organization. Managing Talent at Bertelsmann AG (A) 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.
Building a culture of innovation
– managers at Bertelsmann's Hermreck 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bertelsmann's Hermreck 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.
Threats Managing Talent at Bertelsmann AG (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Managing Talent at Bertelsmann AG (A) are -
High dependence on third party suppliers
– Bertelsmann's Hermreck 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.
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.
Environmental challenges
– Bertelsmann's Hermreck 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. Bertelsmann's Hermreck can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Stagnating economy with rate increase
– Bertelsmann's Hermreck can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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. Bertelsmann's Hermreck can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Bertelsmann's Hermreck in the Organizational Development sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Bertelsmann's Hermreck is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bertelsmann's Hermreck with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Bertelsmann's Hermreck 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 wage structure of Bertelsmann's Hermreck
– 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 Bertelsmann's Hermreck.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Managing Talent at Bertelsmann AG (A), Bertelsmann's Hermreck 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bertelsmann's Hermreck 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 Managing Talent at Bertelsmann AG (A) .
Weighted SWOT Analysis of Managing Talent at Bertelsmann AG (A) 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 Managing Talent at Bertelsmann AG (A) 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 Managing Talent at Bertelsmann AG (A) 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 Managing Talent at Bertelsmann AG (A) 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 Managing Talent at Bertelsmann AG (A) 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 Bertelsmann's Hermreck needs to make to build a sustainable competitive advantage.
