Case Study Description of Driving Change at Seagate
A new CEO, Steve Luczo, together with COO Bill Watkins, have led a turnaround of Seagate, raising productivity dramatically and increasing innovation through teamwork, cross-functional collaboration, and other transformations in the culture of this manufacturer of disk drives for computers. After going private as part of the turnaround, Seagate executed a successful public offering in 2002. Several months later, the CEO wonders how to convince investors that the capabilities built in Seagate's turnaround will help the company flourish and innovate in a demanding technology industry.
Authors :: Rosabeth Moss Kanter, Douglas Raymond, Lyn Baranowski
Swot Analysis of "Driving Change at Seagate" written by Rosabeth Moss Kanter, Douglas Raymond, Lyn Baranowski includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Seagate Turnaround facing as an external strategic factors. Some of the topics covered in Driving Change at Seagate case study are - Strategic Management Strategies, Collaboration, Innovation, IT, Leadership, Leading teams, Organizational culture, Productivity and Organizational Development.
Some of the macro environment factors that can be used to understand the Driving Change at Seagate casestudy better are - – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, there is backlash against globalization,
challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Driving Change at Seagate
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Driving Change at Seagate case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Seagate Turnaround, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Seagate Turnaround 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 Driving Change at Seagate can be done for the following purposes –
1. Strategic planning using facts provided in Driving Change at Seagate case study
2. Improving business portfolio management of Seagate Turnaround
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 Seagate Turnaround
Strengths Driving Change at Seagate | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Seagate Turnaround in Driving Change at Seagate Harvard Business Review case study are -
Diverse revenue streams
– Seagate Turnaround is present in almost all the verticals within the industry. This has provided firm in Driving Change at Seagate 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.
Operational resilience
– The operational resilience strategy in the Driving Change at Seagate 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.
Strong track record of project management
– Seagate Turnaround is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Seagate Turnaround
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Seagate Turnaround does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Organizational Development industry
– Driving Change at Seagate firm has clearly differentiated products in the market place. This has enabled Seagate Turnaround to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Seagate Turnaround to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Seagate Turnaround 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.
Ability to lead change in Organizational Development field
– Seagate Turnaround 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 Seagate Turnaround in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Seagate Turnaround 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
– Seagate Turnaround has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Seagate Turnaround 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.
Low bargaining power of suppliers
– Suppliers of Seagate Turnaround in the sector have low bargaining power. Driving Change at Seagate has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Seagate Turnaround to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Seagate Turnaround has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Driving Change at Seagate 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.
Learning organization
- Seagate Turnaround 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 Seagate Turnaround is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Driving Change at Seagate Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Driving Change at Seagate | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Driving Change at Seagate are -
Lack of clear differentiation of Seagate Turnaround products
– To increase the profitability and margins on the products, Seagate Turnaround needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Seagate Turnaround 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Seagate Turnaround needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Seagate Turnaround is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Seagate Turnaround needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Seagate Turnaround to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Driving Change at Seagate 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 Driving Change at Seagate can leverage the sales team experience to cultivate customer relationships as Seagate Turnaround is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Driving Change at Seagate, is just above the industry average. Seagate Turnaround 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.
Slow to strategic competitive environment developments
– As Driving Change at Seagate HBR case study mentions - Seagate Turnaround 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 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 Seagate Turnaround supply chain. Even after few cautionary changes mentioned in the HBR case study - Driving Change at Seagate, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Seagate Turnaround vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Seagate Turnaround has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
Seagate Turnaround 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 operating costs
– Compare to the competitors, firm in the HBR case study Driving Change at Seagate 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 Seagate Turnaround 's lucrative customers.
Opportunities Driving Change at Seagate | 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 Driving Change at Seagate are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Seagate Turnaround is facing challenges because of the dominance of functional experts in the organization. Driving Change at Seagate 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.
Using analytics as competitive advantage
– Seagate Turnaround 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 Driving Change at Seagate - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Seagate Turnaround to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Seagate Turnaround 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Seagate Turnaround in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Seagate Turnaround 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
– Seagate Turnaround can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Driving Change at Seagate 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 Seagate Turnaround 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.
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 Seagate Turnaround 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.
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 Seagate Turnaround in the consumer business. Now Seagate Turnaround can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Seagate Turnaround can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Seagate Turnaround 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Seagate Turnaround 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 Seagate Turnaround to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Seagate Turnaround can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Driving Change at Seagate External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Driving Change at Seagate are -
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 Seagate Turnaround in the Organizational Development sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Seagate Turnaround in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Seagate Turnaround 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.
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. Seagate Turnaround needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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.
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 Seagate Turnaround business can come under increasing regulations regarding data privacy, data security, etc.
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. Seagate Turnaround can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Seagate Turnaround 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. Seagate Turnaround can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
High dependence on third party suppliers
– Seagate Turnaround 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.
Technology acceleration in Forth Industrial Revolution
– Seagate Turnaround has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Seagate Turnaround 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Seagate Turnaround 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 Driving Change at Seagate .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Driving Change at Seagate, Seagate Turnaround 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 Driving Change at Seagate 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 Driving Change at Seagate 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 Driving Change at Seagate 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 Driving Change at Seagate 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 Driving Change at Seagate 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 Seagate Turnaround needs to make to build a sustainable competitive advantage.
