Siemens Electric Motor Works (A) and (B) (Combined) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Siemens Electric Motor Works (A) and (B) (Combined)
Explores how a cost system can help support a firm's decision to change strategies. In the process, students are exposed to a simple activity-based cost system. Also examines Siemens policy for transferring products between sales and manufacturing divisions. Transfer pricing is based on standard costs generated from their cost system. The case is unique in that the organizational linkage between the product costing system and the transfer pricing system is explored.
Swot Analysis of "Siemens Electric Motor Works (A) and (B) (Combined)" written by Karen H. Wruck, Robin Cooper includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that System Siemens facing as an external strategic factors. Some of the topics covered in Siemens Electric Motor Works (A) and (B) (Combined) case study are - Strategic Management Strategies, Organizational structure, Pricing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Siemens Electric Motor Works (A) and (B) (Combined) casestudy better are - – digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, central banks are concerned over increasing inflation, there is backlash against globalization, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Siemens Electric Motor Works (A) and (B) (Combined)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Siemens Electric Motor Works (A) and (B) (Combined) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the System Siemens, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which System Siemens 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 Siemens Electric Motor Works (A) and (B) (Combined) can be done for the following purposes –
1. Strategic planning using facts provided in Siemens Electric Motor Works (A) and (B) (Combined) case study
2. Improving business portfolio management of System Siemens
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of System Siemens
Strengths Siemens Electric Motor Works (A) and (B) (Combined) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of System Siemens in Siemens Electric Motor Works (A) and (B) (Combined) Harvard Business Review case study are -
High brand equity
– System Siemens has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled System Siemens to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of System Siemens
– The covid-19 pandemic has put organizational resilience at the centre of everthing that System Siemens does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that System Siemens 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 Finance & Accounting segment
- digital transformation varies from industry to industry. For System Siemens digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. System Siemens 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.
Superior customer experience
– The customer experience strategy of System Siemens in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– System Siemens has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. System Siemens 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.
Cross disciplinary teams
– Horizontal connected teams at the System Siemens 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.
Diverse revenue streams
– System Siemens is present in almost all the verticals within the industry. This has provided firm in Siemens Electric Motor Works (A) and (B) (Combined) 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.
Effective Research and Development (R&D)
– System Siemens 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 Siemens Electric Motor Works (A) and (B) (Combined) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– System Siemens 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 Siemens Electric Motor Works (A) and (B) (Combined) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of System Siemens in the sector have low bargaining power. Siemens Electric Motor Works (A) and (B) (Combined) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps System Siemens to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– System Siemens is one of the most innovative firm in sector. Manager in Siemens Electric Motor Works (A) and (B) (Combined) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Siemens Electric Motor Works (A) and (B) (Combined) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Siemens Electric Motor Works (A) and (B) (Combined) are -
High cash cycle compare to competitors
System Siemens 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.
Aligning sales with marketing
– It come across in the case study Siemens Electric Motor Works (A) and (B) (Combined) 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 Siemens Electric Motor Works (A) and (B) (Combined) can leverage the sales team experience to cultivate customer relationships as System Siemens is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Siemens Electric Motor Works (A) and (B) (Combined) HBR case study mentions - System Siemens 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Siemens Electric Motor Works (A) and (B) (Combined) 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 System Siemens has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, System Siemens 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. System Siemens 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.
Interest costs
– Compare to the competition, System Siemens 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.
Products dominated business model
– Even though System Siemens 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 - Siemens Electric Motor Works (A) and (B) (Combined) should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Siemens Electric Motor Works (A) and (B) (Combined), it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Siemens Electric Motor Works (A) and (B) (Combined), in the dynamic environment System Siemens has struggled to respond to the nimble upstart competition. System Siemens has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Siemens Electric Motor Works (A) and (B) (Combined) 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 System Siemens 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, System Siemens 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 Siemens Electric Motor Works (A) and (B) (Combined) | 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 Siemens Electric Motor Works (A) and (B) (Combined) are -
Using analytics as competitive advantage
– System Siemens 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 Siemens Electric Motor Works (A) and (B) (Combined) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help System Siemens to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. System Siemens can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at System Siemens 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 Finance & Accounting segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for System Siemens in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. System Siemens can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. System Siemens can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– System Siemens can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Siemens Electric Motor Works (A) and (B) (Combined) 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
– System Siemens 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects System Siemens can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, System Siemens 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.
Learning at scale
– Online learning technologies has now opened space for System Siemens 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.
Better consumer reach
– The expansion of the 5G network will help System Siemens to increase its market reach. System Siemens 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.
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 System Siemens 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.
Manufacturing automation
– System Siemens can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Threats Siemens Electric Motor Works (A) and (B) (Combined) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Siemens Electric Motor Works (A) and (B) (Combined) are -
Environmental challenges
– System Siemens 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. System Siemens can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, System Siemens 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 Siemens Electric Motor Works (A) and (B) (Combined) .
Consumer confidence and its impact on System Siemens 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents System Siemens with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– System Siemens 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. System Siemens can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Siemens Electric Motor Works (A) and (B) (Combined), System Siemens may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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. System Siemens needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing wage structure of System Siemens
– 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 System Siemens.
Stagnating economy with rate increase
– System Siemens 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.
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 System Siemens in the Finance & Accounting sector and impact the bottomline of the organization.
Regulatory challenges
– System Siemens 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 Finance & Accounting industry regulations.
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.
Weighted SWOT Analysis of Siemens Electric Motor Works (A) and (B) (Combined) 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 Siemens Electric Motor Works (A) and (B) (Combined) 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 Siemens Electric Motor Works (A) and (B) (Combined) 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 Siemens Electric Motor Works (A) and (B) (Combined) 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 Siemens Electric Motor Works (A) and (B) (Combined) 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 System Siemens needs to make to build a sustainable competitive advantage.