Sterling Chemicals, Inc.: Quality and Productivity Improvement Program SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sterling Chemicals, Inc.: Quality and Productivity Improvement Program
Describes the design and implemenation of a quality improvement program. Sterling Chemical's management hoped the program would improve teamwork and productivity at the plant.
Swot Analysis of "Sterling Chemicals, Inc.: Quality and Productivity Improvement Program" written by Karen H. Wruck, A. Scott Keating includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sterling Implemenation facing as an external strategic factors. Some of the topics covered in Sterling Chemicals, Inc.: Quality and Productivity Improvement Program case study are - Strategic Management Strategies, Motivating people, Organizational culture, Product development and Organizational Development.
Some of the macro environment factors that can be used to understand the Sterling Chemicals, Inc.: Quality and Productivity Improvement Program casestudy better are - – technology disruption, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, there is backlash against globalization, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, geopolitical disruptions,
increasing commodity prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Sterling Chemicals, Inc.: Quality and Productivity Improvement Program
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sterling Chemicals, Inc.: Quality and Productivity Improvement Program case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sterling Implemenation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sterling Implemenation 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 Sterling Chemicals, Inc.: Quality and Productivity Improvement Program can be done for the following purposes –
1. Strategic planning using facts provided in Sterling Chemicals, Inc.: Quality and Productivity Improvement Program case study
2. Improving business portfolio management of Sterling Implemenation
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 Sterling Implemenation
Strengths Sterling Chemicals, Inc.: Quality and Productivity Improvement Program | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sterling Implemenation in Sterling Chemicals, Inc.: Quality and Productivity Improvement Program Harvard Business Review case study are -
Learning organization
- Sterling Implemenation 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 Sterling Implemenation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sterling Chemicals, Inc.: Quality and Productivity Improvement Program Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Sterling Implemenation 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 Sterling Chemicals, Inc.: Quality and Productivity Improvement Program - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Sterling Implemenation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sterling Implemenation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Sterling Implemenation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sterling Implemenation 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.
Operational resilience
– The operational resilience strategy in the Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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.
Ability to lead change in Organizational Development field
– Sterling Implemenation 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 Sterling Implemenation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Sterling Implemenation in the sector have low bargaining power. Sterling Chemicals, Inc.: Quality and Productivity Improvement Program has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sterling Implemenation to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Sterling Implemenation 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 Sterling Chemicals, Inc.: Quality and Productivity Improvement Program HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Sterling Implemenation 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.
High brand equity
– Sterling Implemenation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sterling Implemenation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Sterling Implemenation is one of the most innovative firm in sector. Manager in Sterling Chemicals, Inc.: Quality and Productivity Improvement Program Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Organizational Development industry
– Sterling Chemicals, Inc.: Quality and Productivity Improvement Program firm has clearly differentiated products in the market place. This has enabled Sterling Implemenation to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Sterling Implemenation to invest into research and development (R&D) and innovation.
Weaknesses Sterling Chemicals, Inc.: Quality and Productivity Improvement Program | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sterling Chemicals, Inc.: Quality and Productivity Improvement Program are -
High cash cycle compare to competitors
Sterling Implemenation 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sterling Chemicals, Inc.: Quality and Productivity Improvement Program, it seems that the employees of Sterling Implemenation don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Sterling Chemicals, Inc.: Quality and Productivity Improvement Program HBR case study mentions - Sterling Implemenation 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 operating costs
– Compare to the competitors, firm in the HBR case study Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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 Sterling Implemenation 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sterling Chemicals, Inc.: Quality and Productivity Improvement Program, is just above the industry average. Sterling Implemenation needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Lack of clear differentiation of Sterling Implemenation products
– To increase the profitability and margins on the products, Sterling Implemenation needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Sterling Implemenation supply chain. Even after few cautionary changes mentioned in the HBR case study - Sterling Chemicals, Inc.: Quality and Productivity Improvement Program, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sterling Implemenation vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Sterling Chemicals, Inc.: Quality and Productivity Improvement Program, 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.
Increasing silos among functional specialists
– The organizational structure of Sterling Implemenation is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Sterling Implemenation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sterling Implemenation to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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 Sterling Implemenation has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sterling Chemicals, Inc.: Quality and Productivity Improvement Program, in the dynamic environment Sterling Implemenation has struggled to respond to the nimble upstart competition. Sterling Implemenation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Sterling Chemicals, Inc.: Quality and Productivity Improvement Program | 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 Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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 Sterling Implemenation in the consumer business. Now Sterling Implemenation can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Sterling Implemenation 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sterling Implemenation 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. Sterling Implemenation 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.
Manufacturing automation
– Sterling Implemenation 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sterling Implemenation 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 Sterling Implemenation to hire the very best people irrespective of their geographical location.
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. Sterling Implemenation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sterling Implemenation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sterling Implemenation can use these opportunities to build new business models that can help the communities that Sterling Implemenation operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sterling Implemenation 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, Sterling Chemicals, Inc.: Quality and Productivity Improvement Program, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Sterling Implemenation 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.
Buying journey improvements
– Sterling Implemenation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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.
Building a culture of innovation
– managers at Sterling Implemenation 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.
Creating value in data economy
– The success of analytics program of Sterling Implemenation has opened avenues for new revenue streams for the organization in the industry. This can help Sterling Implemenation to build a more holistic ecosystem as suggested in the Sterling Chemicals, Inc.: Quality and Productivity Improvement Program case study. Sterling Implemenation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Sterling Chemicals, Inc.: Quality and Productivity Improvement Program External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sterling Chemicals, Inc.: Quality and Productivity Improvement Program are -
Increasing wage structure of Sterling Implemenation
– 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 Sterling Implemenation.
Environmental challenges
– Sterling Implemenation 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. Sterling Implemenation can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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. Sterling Implemenation needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Sterling Implemenation 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.
Regulatory challenges
– Sterling Implemenation 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, Sterling Implemenation 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 Sterling Chemicals, Inc.: Quality and Productivity Improvement Program .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sterling Chemicals, Inc.: Quality and Productivity Improvement Program, Sterling Implemenation 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 .
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 Sterling Implemenation.
Technology acceleration in Forth Industrial Revolution
– Sterling Implemenation has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Sterling Implemenation 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. Sterling Implemenation 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.
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 Sterling Implemenation in the Organizational Development sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Sterling Implemenation 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.
Shortening product life cycle
– it is one of the major threat that Sterling Implemenation is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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 Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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 Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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 Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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 Sterling Chemicals, Inc.: Quality and Productivity Improvement Program 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 Sterling Implemenation needs to make to build a sustainable competitive advantage.