Case Study Description of Management Effect Pty Ltd: Competing Beyond Knowledge Management
Presents the start-up initiatives of a former management consultant in building a consulting company in Australia. Highlights the firm's strategy and approach, how it differentiates itself from other consulting firms, and its effort in developing and building knowledge management systems.
Authors :: Ali Farhoomand, Guy Gable, Marissa Salvia McCauley
Swot Analysis of "Management Effect Pty Ltd: Competing Beyond Knowledge Management" written by Ali Farhoomand, Guy Gable, Marissa Salvia McCauley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pty Consulting facing as an external strategic factors. Some of the topics covered in Management Effect Pty Ltd: Competing Beyond Knowledge Management case study are - Strategic Management Strategies, Competitive strategy, Developing employees, Knowledge management and Organizational Development.
Some of the macro environment factors that can be used to understand the Management Effect Pty Ltd: Competing Beyond Knowledge Management casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing energy prices, technology disruption, geopolitical disruptions, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Management Effect Pty Ltd: Competing Beyond Knowledge Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Management Effect Pty Ltd: Competing Beyond Knowledge Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pty Consulting, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pty Consulting 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management can be done for the following purposes –
1. Strategic planning using facts provided in Management Effect Pty Ltd: Competing Beyond Knowledge Management case study
2. Improving business portfolio management of Pty Consulting
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 Pty Consulting
Strengths Management Effect Pty Ltd: Competing Beyond Knowledge Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pty Consulting in Management Effect Pty Ltd: Competing Beyond Knowledge Management Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Pty Consulting in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Pty Consulting 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Pty Consulting 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 Ali Farhoomand, Guy Gable, Marissa Salvia McCauley 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.
Ability to recruit top talent
– Pty Consulting is one of the leading recruiters in the industry. Managers in the Management Effect Pty Ltd: Competing Beyond Knowledge Management are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Pty Consulting 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 Pty Consulting is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Management Effect Pty Ltd: Competing Beyond Knowledge Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Pty Consulting has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Management Effect Pty Ltd: Competing Beyond Knowledge Management 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
– Pty Consulting is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Pty Consulting digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pty Consulting 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.
Cross disciplinary teams
– Horizontal connected teams at the Pty Consulting 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.
High brand equity
– Pty Consulting has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pty Consulting to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Organizational Development industry
– Management Effect Pty Ltd: Competing Beyond Knowledge Management firm has clearly differentiated products in the market place. This has enabled Pty Consulting to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Pty Consulting to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Management Effect Pty Ltd: Competing Beyond Knowledge Management 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.
Weaknesses Management Effect Pty Ltd: Competing Beyond Knowledge Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Management Effect Pty Ltd: Competing Beyond Knowledge Management are -
Slow decision making process
– As mentioned earlier in the report, Pty Consulting 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. Pty Consulting 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.
Increasing silos among functional specialists
– The organizational structure of Pty Consulting is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Pty Consulting needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pty Consulting to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Management Effect Pty Ltd: Competing Beyond Knowledge Management 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management can leverage the sales team experience to cultivate customer relationships as Pty Consulting is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Pty Consulting, firm in the HBR case study Management Effect Pty Ltd: Competing Beyond Knowledge Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Pty Consulting products
– To increase the profitability and margins on the products, Pty Consulting needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Management Effect Pty Ltd: Competing Beyond Knowledge Management 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 Pty Consulting 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Management Effect Pty Ltd: Competing Beyond Knowledge Management, 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.
Need for greater diversity
– Pty Consulting has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Management Effect Pty Ltd: Competing Beyond Knowledge Management HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Pty Consulting has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Pty Consulting 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.
High cash cycle compare to competitors
Pty Consulting 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.
Opportunities Management Effect Pty Ltd: Competing Beyond Knowledge Management | 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management are -
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. Pty Consulting can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Pty Consulting 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.
Leveraging digital technologies
– Pty Consulting 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.
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. Pty Consulting can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Pty Consulting to increase its market reach. Pty Consulting 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pty Consulting 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 Pty Consulting to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Pty Consulting has opened avenues for new revenue streams for the organization in the industry. This can help Pty Consulting to build a more holistic ecosystem as suggested in the Management Effect Pty Ltd: Competing Beyond Knowledge Management case study. Pty Consulting can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Pty Consulting 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.
Using analytics as competitive advantage
– Pty Consulting 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pty Consulting to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Pty Consulting 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pty Consulting can use these opportunities to build new business models that can help the communities that Pty Consulting operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Manufacturing automation
– Pty Consulting 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.
Buying journey improvements
– Pty Consulting can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Management Effect Pty Ltd: Competing Beyond Knowledge Management 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.
Threats Management Effect Pty Ltd: Competing Beyond Knowledge Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Management Effect Pty Ltd: Competing Beyond Knowledge Management are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pty Consulting 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.
Environmental challenges
– Pty Consulting 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. Pty Consulting can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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 Pty Consulting.
High dependence on third party suppliers
– Pty Consulting 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.
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. Pty Consulting needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Pty Consulting is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Pty Consulting 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.
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 Pty Consulting business can come under increasing regulations regarding data privacy, data security, etc.
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 Pty Consulting in the Organizational Development sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pty Consulting 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management .
Technology acceleration in Forth Industrial Revolution
– Pty Consulting has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Pty Consulting 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.
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. Pty Consulting 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 Pty Consulting 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.
Weighted SWOT Analysis of Management Effect Pty Ltd: Competing Beyond Knowledge Management 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management 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 Management Effect Pty Ltd: Competing Beyond Knowledge Management 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 Pty Consulting needs to make to build a sustainable competitive advantage.
