ABB in the New Millennium: New Leadership, New Strategy, New Organization SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ABB in the New Millennium: New Leadership, New Strategy, New Organization
Takes an inside look at ABB's unprecedented 1997 to 2000 transformation under Gvran Lindahl, the second CEO of this electrical engineering powerhouse, who succeeded Percy Barnevik during late 1996. After a highly successful first decade of existence under Barnevik (1988 to 1996), ABB found itself in the midst of a crisis by the end of 1997, after the combined effects of global deregulation, radical technological innovations, and an unpredictable but sweeping financial crisis across most emerging markets. ABB's response was to shift its strategic focus radically to favor knowledge- and service-based offerings across all of its businesses. The company's implementation of such strategy took place in two bold steps. The first one comprised a major global restructuring of ABB, as a result of which the company divested from mature manufacturing businesses such as power generation and transportation and became a global leader in areas such as industrial process automation and electrical distribution solutions. The second step was to transform ABB into a fast-growing high-technology company, moving from old to new economy Internet-based services and solutions. The case contains two mini-cases in ABB distribution solutions and ABB's global information systems group--two instances that show first-hand the pains of rapidly transforming a vast, manufacturing concern into an Internet- and solutions-based powerhouse as the new millennium unfolds.
Swot Analysis of "ABB in the New Millennium: New Leadership, New Strategy, New Organization" written by Piero Morosini includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abb Abb's facing as an external strategic factors. Some of the topics covered in ABB in the New Millennium: New Leadership, New Strategy, New Organization case study are - Strategic Management Strategies, Globalization, Internet, Mergers & acquisitions, Reorganization, Strategy execution and Organizational Development.
Some of the macro environment factors that can be used to understand the ABB in the New Millennium: New Leadership, New Strategy, New Organization casestudy better are - – there is backlash against globalization, increasing energy prices, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models,
increasing commodity prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of ABB in the New Millennium: New Leadership, New Strategy, New Organization
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ABB in the New Millennium: New Leadership, New Strategy, New Organization case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abb Abb's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abb Abb'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 ABB in the New Millennium: New Leadership, New Strategy, New Organization can be done for the following purposes –
1. Strategic planning using facts provided in ABB in the New Millennium: New Leadership, New Strategy, New Organization case study
2. Improving business portfolio management of Abb Abb's
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 Abb Abb's
Strengths ABB in the New Millennium: New Leadership, New Strategy, New Organization | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abb Abb's in ABB in the New Millennium: New Leadership, New Strategy, New Organization Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Abb Abb's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the ABB in the New Millennium: New Leadership, New Strategy, New Organization 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.
High brand equity
– Abb Abb's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Abb Abb's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Abb Abb'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.
Learning organization
- Abb Abb'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 Abb Abb's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ABB in the New Millennium: New Leadership, New Strategy, New Organization Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Abb Abb's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abb Abb's 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.
Training and development
– Abb Abb's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ABB in the New Millennium: New Leadership, New Strategy, New Organization 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.
Strong track record of project management
– Abb Abb'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.
Diverse revenue streams
– Abb Abb's is present in almost all the verticals within the industry. This has provided firm in ABB in the New Millennium: New Leadership, New Strategy, New Organization 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.
Ability to lead change in Organizational Development field
– Abb Abb'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 Abb Abb's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Abb Abb's is one of the leading recruiters in the industry. Managers in the ABB in the New Millennium: New Leadership, New Strategy, New Organization are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Abb Abb'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 ABB in the New Millennium: New Leadership, New Strategy, New Organization HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses ABB in the New Millennium: New Leadership, New Strategy, New Organization | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ABB in the New Millennium: New Leadership, New Strategy, New Organization are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ABB in the New Millennium: New Leadership, New Strategy, New Organization, is just above the industry average. Abb Abb'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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Abb Abb's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ABB in the New Millennium: New Leadership, New Strategy, New Organization can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Abb Abb's 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.
Slow decision making process
– As mentioned earlier in the report, Abb Abb'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. Abb Abb'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.
No frontier risks strategy
– After analyzing the HBR case study ABB in the New Millennium: New Leadership, New Strategy, New Organization, 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.
Skills based hiring
– The stress on hiring functional specialists at Abb Abb'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.
Need for greater diversity
– Abb Abb's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study ABB in the New Millennium: New Leadership, New Strategy, New Organization 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 ABB in the New Millennium: New Leadership, New Strategy, New Organization can leverage the sales team experience to cultivate customer relationships as Abb Abb's is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study ABB in the New Millennium: New Leadership, New Strategy, New Organization 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 Abb Abb's 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Abb Abb's 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 cash cycle compare to competitors
Abb Abb's 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.
Opportunities ABB in the New Millennium: New Leadership, New Strategy, New Organization | 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 ABB in the New Millennium: New Leadership, New Strategy, New Organization are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Abb Abb'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, ABB in the New Millennium: New Leadership, New Strategy, New Organization, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Abb Abb'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 Organizational Development segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Abb Abb'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 ABB in the New Millennium: New Leadership, New Strategy, New Organization - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Abb Abb's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Abb Abb's 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.
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 Abb Abb's in the consumer business. Now Abb Abb's can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Abb Abb'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 Abb Abb's has opened avenues for new revenue streams for the organization in the industry. This can help Abb Abb's to build a more holistic ecosystem as suggested in the ABB in the New Millennium: New Leadership, New Strategy, New Organization case study. Abb Abb's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Abb Abb's 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 Abb Abb's to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Abb Abb's 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.
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. Abb Abb'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. Abb Abb'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.
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. Abb Abb's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abb Abb's can use these opportunities to build new business models that can help the communities that Abb Abb's operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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. Abb Abb's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats ABB in the New Millennium: New Leadership, New Strategy, New Organization External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ABB in the New Millennium: New Leadership, New Strategy, New Organization are -
Regulatory challenges
– Abb Abb's 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.
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 Abb Abb's.
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. Abb Abb's needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Abb Abb's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Abb Abb's 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.
Technology acceleration in Forth Industrial Revolution
– Abb Abb's has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Abb Abb's 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.
Increasing wage structure of Abb Abb'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 Abb Abb's.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ABB in the New Millennium: New Leadership, New Strategy, New Organization, Abb Abb'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 Organizational Development .
Stagnating economy with rate increase
– Abb Abb'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.
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. Abb Abb's 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.
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. Abb Abb's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Abb Abb'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.
Environmental challenges
– Abb Abb'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. Abb Abb's can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Weighted SWOT Analysis of ABB in the New Millennium: New Leadership, New Strategy, New Organization 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 ABB in the New Millennium: New Leadership, New Strategy, New Organization 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 ABB in the New Millennium: New Leadership, New Strategy, New Organization 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 ABB in the New Millennium: New Leadership, New Strategy, New Organization 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 ABB in the New Millennium: New Leadership, New Strategy, New Organization 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 Abb Abb's needs to make to build a sustainable competitive advantage.