Case Study Description of Kit Hindrichs at Pentagram (B)
This case focuses on Kit Hindrichs, a 65 year-old partner at Pentagram, a privately-owned multidisciplinary design firm. One of the world's most prestigious design firms, Pentagram was founded by five designers from different disciplines in London in the 1970s. By 2008, Pentagram remained small, with less than 30 partners, each a veritable star in his or her own right. Pentagram had two founding principles, the first of which was equality. The equality principle meant that leadership was evenly distributed; partners with seniority had no greater formal authority than newer partners, and the only formal leadership role was a chairman position, which, after being held with a founder for 30 years, was rotated every two years. Further, Pentagram had no corporate office; each partner was expected to manage their own financial, marketing, and human resource functions. Pentagram's second principle was generosity. All partners were equal shareholders in the firm. Pentagram branched out to New York in the early 1980s, and in the late 1980s, Hinrichs established a San Francisco location. This case describes how Hinrichs grapples with the future of the San Francisco office, once learning he will be its only partner.
Swot Analysis of "Kit Hindrichs at Pentagram (B)" written by Linda A. Hill, Emily A. Stecker includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pentagram Hindrichs facing as an external strategic factors. Some of the topics covered in Kit Hindrichs at Pentagram (B) case study are - Strategic Management Strategies, Collaboration, Creativity, Diversity, Organizational structure and Organizational Development.
Some of the macro environment factors that can be used to understand the Kit Hindrichs at Pentagram (B) casestudy better are - – geopolitical disruptions, wage bills are increasing, increasing transportation and logistics costs, increasing energy prices, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Kit Hindrichs at Pentagram (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kit Hindrichs at Pentagram (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pentagram Hindrichs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pentagram Hindrichs 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 Kit Hindrichs at Pentagram (B) can be done for the following purposes –
1. Strategic planning using facts provided in Kit Hindrichs at Pentagram (B) case study
2. Improving business portfolio management of Pentagram Hindrichs
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 Pentagram Hindrichs
Strengths Kit Hindrichs at Pentagram (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pentagram Hindrichs in Kit Hindrichs at Pentagram (B) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Pentagram Hindrichs 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.
Innovation driven organization
– Pentagram Hindrichs is one of the most innovative firm in sector. Manager in Kit Hindrichs at Pentagram (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Pentagram Hindrichs is present in almost all the verticals within the industry. This has provided firm in Kit Hindrichs at Pentagram (B) 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.
Superior customer experience
– The customer experience strategy of Pentagram Hindrichs 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)
– Pentagram Hindrichs 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 Kit Hindrichs at Pentagram (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Pentagram Hindrichs 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Pentagram Hindrichs digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pentagram Hindrichs 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
– Kit Hindrichs at Pentagram (B) firm has clearly differentiated products in the market place. This has enabled Pentagram Hindrichs to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Pentagram Hindrichs to invest into research and development (R&D) and innovation.
High brand equity
– Pentagram Hindrichs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pentagram Hindrichs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Organizational Development field
– Pentagram Hindrichs 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 Pentagram Hindrichs in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Pentagram Hindrichs 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 Linda A. Hill, Emily A. Stecker 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.
Low bargaining power of suppliers
– Suppliers of Pentagram Hindrichs in the sector have low bargaining power. Kit Hindrichs at Pentagram (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pentagram Hindrichs to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Kit Hindrichs at Pentagram (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kit Hindrichs at Pentagram (B) are -
Slow to strategic competitive environment developments
– As Kit Hindrichs at Pentagram (B) HBR case study mentions - Pentagram Hindrichs 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pentagram Hindrichs is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kit Hindrichs at Pentagram (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kit Hindrichs at Pentagram (B), in the dynamic environment Pentagram Hindrichs has struggled to respond to the nimble upstart competition. Pentagram Hindrichs has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Pentagram Hindrichs supply chain. Even after few cautionary changes mentioned in the HBR case study - Kit Hindrichs at Pentagram (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pentagram Hindrichs vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Pentagram Hindrichs is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Pentagram Hindrichs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pentagram Hindrichs to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Pentagram Hindrichs 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kit Hindrichs at Pentagram (B) 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 Pentagram Hindrichs has relatively successful track record of launching new products.
Need for greater diversity
– Pentagram Hindrichs 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.
Interest costs
– Compare to the competition, Pentagram Hindrichs 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.
Skills based hiring
– The stress on hiring functional specialists at Pentagram Hindrichs 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.
Low market penetration in new markets
– Outside its home market of Pentagram Hindrichs, firm in the HBR case study Kit Hindrichs at Pentagram (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Kit Hindrichs at Pentagram (B) | 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 Kit Hindrichs at Pentagram (B) 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 Pentagram Hindrichs in the consumer business. Now Pentagram Hindrichs can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pentagram Hindrichs can use these opportunities to build new business models that can help the communities that Pentagram Hindrichs operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pentagram Hindrichs 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pentagram Hindrichs is facing challenges because of the dominance of functional experts in the organization. Kit Hindrichs at Pentagram (B) 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.
Learning at scale
– Online learning technologies has now opened space for Pentagram Hindrichs 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.
Loyalty marketing
– Pentagram Hindrichs 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pentagram Hindrichs 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, Kit Hindrichs at Pentagram (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Pentagram Hindrichs 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 Pentagram Hindrichs 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pentagram Hindrichs can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pentagram Hindrichs 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 Pentagram Hindrichs to hire the very best people irrespective of their geographical location.
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. Pentagram Hindrichs can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Pentagram Hindrichs 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 Kit Hindrichs at Pentagram (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pentagram Hindrichs to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Kit Hindrichs at Pentagram (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kit Hindrichs at Pentagram (B) are -
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. Pentagram Hindrichs can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Pentagram Hindrichs needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Regulatory challenges
– Pentagram Hindrichs 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pentagram Hindrichs 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 Kit Hindrichs at Pentagram (B) .
High dependence on third party suppliers
– Pentagram Hindrichs 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.
Stagnating economy with rate increase
– Pentagram Hindrichs 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.
Environmental challenges
– Pentagram Hindrichs 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. Pentagram Hindrichs can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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.
Shortening product life cycle
– it is one of the major threat that Pentagram Hindrichs is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Pentagram Hindrichs business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Pentagram Hindrichs
– 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 Pentagram Hindrichs.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kit Hindrichs at Pentagram (B), Pentagram Hindrichs 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 .
Weighted SWOT Analysis of Kit Hindrichs at Pentagram (B) 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 Kit Hindrichs at Pentagram (B) 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 Kit Hindrichs at Pentagram (B) 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 Kit Hindrichs at Pentagram (B) 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 Kit Hindrichs at Pentagram (B) 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 Pentagram Hindrichs needs to make to build a sustainable competitive advantage.
