Swot Analysis of "General Electric: Valley Forge (E)" written by Robert L. Simons includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Forge Valley facing as an external strategic factors. Some of the topics covered in General Electric: Valley Forge (E) case study are - Strategic Management Strategies, Ethics, Government, Managing people, Negotiations and Finance & Accounting.
Some of the macro environment factors that can be used to understand the General Electric: Valley Forge (E) casestudy better are - – increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, geopolitical disruptions, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing commodity prices,
challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of General Electric: Valley Forge (E)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in General Electric: Valley Forge (E) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Forge Valley, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Forge Valley 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 General Electric: Valley Forge (E) can be done for the following purposes –
1. Strategic planning using facts provided in General Electric: Valley Forge (E) case study
2. Improving business portfolio management of Forge Valley
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 Forge Valley
Strengths General Electric: Valley Forge (E) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Forge Valley in General Electric: Valley Forge (E) Harvard Business Review case study are -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Forge Valley digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Forge Valley 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.
Learning organization
- Forge Valley 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 Forge Valley is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in General Electric: Valley Forge (E) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Forge Valley in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Forge Valley 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 General Electric: Valley Forge (E) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Finance & Accounting industry
– General Electric: Valley Forge (E) firm has clearly differentiated products in the market place. This has enabled Forge Valley to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Forge Valley to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Forge Valley in the sector have low bargaining power. General Electric: Valley Forge (E) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Forge Valley to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Forge Valley has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Forge Valley 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.
Organizational Resilience of Forge Valley
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Forge Valley does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Forge Valley has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Forge Valley to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Forge Valley is one of the leading recruiters in the industry. Managers in the General Electric: Valley Forge (E) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Finance & Accounting field
– Forge Valley 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 Forge Valley in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Forge Valley is one of the most innovative firm in sector. Manager in General Electric: Valley Forge (E) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses General Electric: Valley Forge (E) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of General Electric: Valley Forge (E) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study General Electric: Valley Forge (E), is just above the industry average. Forge Valley 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the General Electric: Valley Forge (E) 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 Forge Valley has relatively successful track record of launching new products.
Lack of clear differentiation of Forge Valley products
– To increase the profitability and margins on the products, Forge Valley needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Forge Valley 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.
Interest costs
– Compare to the competition, Forge Valley 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Forge Valley 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.
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 Forge Valley supply chain. Even after few cautionary changes mentioned in the HBR case study - General Electric: Valley Forge (E), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Forge Valley vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Forge Valley is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Forge Valley needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Forge Valley to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Forge Valley 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 operating costs
– Compare to the competitors, firm in the HBR case study General Electric: Valley Forge (E) 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 Forge Valley 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Forge Valley is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study General Electric: Valley Forge (E) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities General Electric: Valley Forge (E) | 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 General Electric: Valley Forge (E) are -
Building a culture of innovation
– managers at Forge Valley 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.
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. Forge Valley 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. Forge Valley 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.
Better consumer reach
– The expansion of the 5G network will help Forge Valley to increase its market reach. Forge Valley 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Forge Valley can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Forge Valley 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.
Loyalty marketing
– Forge Valley 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.
Leveraging digital technologies
– Forge Valley 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Forge Valley 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 Forge Valley to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Forge Valley has opened avenues for new revenue streams for the organization in the industry. This can help Forge Valley to build a more holistic ecosystem as suggested in the General Electric: Valley Forge (E) case study. Forge Valley can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Forge Valley in the consumer business. Now Forge Valley can target international markets with far fewer capital restrictions requirements than the existing system.
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 Forge Valley 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Forge Valley 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.
Using analytics as competitive advantage
– Forge Valley 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 General Electric: Valley Forge (E) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Forge Valley to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats General Electric: Valley Forge (E) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study General Electric: Valley Forge (E) are -
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.
Stagnating economy with rate increase
– Forge Valley 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.
Shortening product life cycle
– it is one of the major threat that Forge Valley is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Forge Valley with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Forge Valley.
Technology acceleration in Forth Industrial Revolution
– Forge Valley has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Forge Valley 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.
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. Forge Valley 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 Forge Valley in the Finance & Accounting sector and impact the bottomline of the organization.
Regulatory challenges
– Forge Valley 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study General Electric: Valley Forge (E), Forge Valley 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Forge Valley 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.
Environmental challenges
– Forge Valley 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. Forge Valley can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Forge Valley
– 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 Forge Valley.
Weighted SWOT Analysis of General Electric: Valley Forge (E) 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 General Electric: Valley Forge (E) 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 General Electric: Valley Forge (E) 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 General Electric: Valley Forge (E) 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 General Electric: Valley Forge (E) 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 Forge Valley needs to make to build a sustainable competitive advantage.