Case Study Description of Olympus Optical Co. Ltd. (B): Functional Group Management
Documents the emergence of the functional group management system at Olympus's camera manufacturing facility. This system increases the pressure on the work force to decrease costs and improve output by treating the facility's 10 autonomous groups as profit centers, not cost centers. This case illustrates how Japanese firms use profit pressure to improve performance.
Swot Analysis of "Olympus Optical Co. Ltd. (B): Functional Group Management" written by Robin Cooper includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Functional Olympus's facing as an external strategic factors. Some of the topics covered in Olympus Optical Co. Ltd. (B): Functional Group Management case study are - Strategic Management Strategies, Developing employees and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Olympus Optical Co. Ltd. (B): Functional Group Management casestudy better are - – there is backlash against globalization, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing energy prices, increasing commodity prices,
wage bills are increasing, technology disruption, etc
Introduction to SWOT Analysis of Olympus Optical Co. Ltd. (B): Functional Group Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Olympus Optical Co. Ltd. (B): Functional Group Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Functional Olympus's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Functional Olympus's 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 Olympus Optical Co. Ltd. (B): Functional Group Management can be done for the following purposes –
1. Strategic planning using facts provided in Olympus Optical Co. Ltd. (B): Functional Group Management case study
2. Improving business portfolio management of Functional Olympus's
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 Functional Olympus's
Strengths Olympus Optical Co. Ltd. (B): Functional Group Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Functional Olympus's in Olympus Optical Co. Ltd. (B): Functional Group Management Harvard Business Review case study are -
Strong track record of project management
– Functional Olympus's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Functional Olympus's 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.
Ability to lead change in Finance & Accounting field
– Functional Olympus's 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 Functional Olympus's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Functional Olympus's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Functional Olympus's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Functional Olympus's in the sector have low bargaining power. Olympus Optical Co. Ltd. (B): Functional Group Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Functional Olympus's to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Functional Olympus's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Functional Olympus's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Olympus Optical Co. Ltd. (B): Functional Group 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.
Diverse revenue streams
– Functional Olympus's is present in almost all the verticals within the industry. This has provided firm in Olympus Optical Co. Ltd. (B): Functional Group Management 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.
Organizational Resilience of Functional Olympus's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Functional Olympus's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Functional Olympus's 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 Olympus Optical Co. Ltd. (B): Functional Group Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Functional Olympus's 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 Olympus Optical Co. Ltd. (B): Functional Group 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.
Learning organization
- Functional Olympus's 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 Functional Olympus's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Olympus Optical Co. Ltd. (B): Functional Group Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Olympus Optical Co. Ltd. (B): Functional Group Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Olympus Optical Co. Ltd. (B): Functional Group Management are -
Slow decision making process
– As mentioned earlier in the report, Functional Olympus's 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. Functional Olympus's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Functional Olympus's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Olympus Optical Co. Ltd. (B): Functional Group Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Functional Olympus's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Olympus Optical Co. Ltd. (B): Functional Group 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 Functional Olympus's 's lucrative customers.
Slow to strategic competitive environment developments
– As Olympus Optical Co. Ltd. (B): Functional Group Management HBR case study mentions - Functional Olympus's 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 Olympus Optical Co. Ltd. (B): Functional Group 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 Functional Olympus's has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Olympus Optical Co. Ltd. (B): Functional Group Management, it seems that the employees of Functional Olympus's 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.
Lack of clear differentiation of Functional Olympus's products
– To increase the profitability and margins on the products, Functional Olympus's needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Olympus Optical Co. Ltd. (B): Functional Group Management, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Olympus Optical Co. Ltd. (B): Functional Group Management, is just above the industry average. Functional Olympus's 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.
Skills based hiring
– The stress on hiring functional specialists at Functional Olympus's 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.
Opportunities Olympus Optical Co. Ltd. (B): Functional Group 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 Olympus Optical Co. Ltd. (B): Functional Group Management are -
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. Functional Olympus's 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. Functional Olympus's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Functional Olympus's 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.
Creating value in data economy
– The success of analytics program of Functional Olympus's has opened avenues for new revenue streams for the organization in the industry. This can help Functional Olympus's to build a more holistic ecosystem as suggested in the Olympus Optical Co. Ltd. (B): Functional Group Management case study. Functional Olympus's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Functional Olympus's 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.
Manufacturing automation
– Functional Olympus's 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.
Using analytics as competitive advantage
– Functional Olympus's 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 Olympus Optical Co. Ltd. (B): Functional Group Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Functional Olympus's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Functional Olympus's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Functional Olympus's 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.
Better consumer reach
– The expansion of the 5G network will help Functional Olympus's to increase its market reach. Functional Olympus's 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.
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. Functional Olympus's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Functional Olympus's is facing challenges because of the dominance of functional experts in the organization. Olympus Optical Co. Ltd. (B): Functional Group Management 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Functional Olympus's 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, Olympus Optical Co. Ltd. (B): Functional Group Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Functional Olympus's in the consumer business. Now Functional Olympus's can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Olympus Optical Co. Ltd. (B): Functional Group Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Olympus Optical Co. Ltd. (B): Functional Group Management are -
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.
Stagnating economy with rate increase
– Functional Olympus's 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.
Consumer confidence and its impact on Functional Olympus's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Functional Olympus's in the Finance & Accounting industry. The Finance & Accounting 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.
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. Functional Olympus's needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Functional Olympus's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing wage structure of Functional Olympus's
– 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 Functional Olympus's.
High dependence on third party suppliers
– Functional Olympus's 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.
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 Functional Olympus's in the Finance & Accounting sector and impact the bottomline of the organization.
Environmental challenges
– Functional Olympus's 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. Functional Olympus's can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Olympus Optical Co. Ltd. (B): Functional Group Management, Functional Olympus's 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 .
Technology acceleration in Forth Industrial Revolution
– Functional Olympus's has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Functional Olympus's needs to keep up with the evolution of technology in the Finance & Accounting 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.
Weighted SWOT Analysis of Olympus Optical Co. Ltd. (B): Functional Group 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 Olympus Optical Co. Ltd. (B): Functional Group 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 Olympus Optical Co. Ltd. (B): Functional Group 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 Olympus Optical Co. Ltd. (B): Functional Group 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 Olympus Optical Co. Ltd. (B): Functional Group 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 Functional Olympus's needs to make to build a sustainable competitive advantage.
