SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy
Shortly after accepting the offer to become CEO of the newly created SKF Bearings Services in 1987, Goran Malm, long a proponent of market-driven change at SKF, defined his mission: trouble-free operations. Rather than simply make and sell bearings, which SKF, the world's largest bearing company, had excelled at, SKF Bearing Services was to offer customers solutions. Quickly selecting his key team members, Malm set about instituting a market-driven approach throughout his division, which was responsible for handling the vehicle and industrial aftermarket. Push through distributors and pull through advertising and the creation of maintenance support centers, which he called service factories, were key to implementing the change process.
Swot Analysis of "SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy" written by Sandra Vandermerwe, Marika Taishoff includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Skf Bearings facing as an external strategic factors. Some of the topics covered in SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy case study are - Strategic Management Strategies, Marketing, Reorganization and Organizational Development.
Some of the macro environment factors that can be used to understand the SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy casestudy better are - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, supply chains are disrupted by pandemic ,
geopolitical disruptions, increasing commodity prices, etc
Introduction to SWOT Analysis of SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Skf Bearings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Skf Bearings 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 SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy can be done for the following purposes –
1. Strategic planning using facts provided in SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy case study
2. Improving business portfolio management of Skf Bearings
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 Skf Bearings
Strengths SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Skf Bearings in SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy Harvard Business Review case study are -
High switching costs
– The high switching costs that Skf Bearings 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.
Strong track record of project management
– Skf Bearings is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Skf Bearings is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Sandra Vandermerwe, Marika Taishoff can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Skf Bearings in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Organizational Development field
– Skf Bearings 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 Skf Bearings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Skf Bearings
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Skf Bearings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Skf Bearings is one of the leading recruiters in the industry. Managers in the SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Skf Bearings is present in almost all the verticals within the industry. This has provided firm in SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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.
Training and development
– Skf Bearings has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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.
Sustainable margins compare to other players in Organizational Development industry
– SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy firm has clearly differentiated products in the market place. This has enabled Skf Bearings to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Skf Bearings to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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.
Cross disciplinary teams
– Horizontal connected teams at the Skf Bearings 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.
Weaknesses SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy are -
Skills based hiring
– The stress on hiring functional specialists at Skf Bearings 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.
Interest costs
– Compare to the competition, Skf Bearings 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.
High operating costs
– Compare to the competitors, firm in the HBR case study SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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 Skf Bearings 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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 Skf Bearings has relatively successful track record of launching new products.
High cash cycle compare to competitors
Skf Bearings 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.
Lack of clear differentiation of Skf Bearings products
– To increase the profitability and margins on the products, Skf Bearings needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Skf Bearings is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy HBR case study mentions - Skf Bearings 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.
Aligning sales with marketing
– It come across in the case study SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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 SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy can leverage the sales team experience to cultivate customer relationships as Skf Bearings is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy, it seems that the employees of Skf Bearings 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.
Low market penetration in new markets
– Outside its home market of Skf Bearings, firm in the HBR case study SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy | 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 SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy are -
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. Skf Bearings 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. Skf Bearings 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.
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 Skf Bearings in the consumer business. Now Skf Bearings can target international markets with far fewer capital restrictions requirements than the existing system.
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. Skf Bearings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Skf Bearings 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 Skf Bearings to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Skf Bearings 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Skf Bearings can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Skf Bearings 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Skf Bearings 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, SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Skf Bearings 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Skf Bearings is facing challenges because of the dominance of functional experts in the organization. SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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.
Better consumer reach
– The expansion of the 5G network will help Skf Bearings to increase its market reach. Skf Bearings 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.
Developing new processes and practices
– Skf Bearings 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Skf Bearings 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.
Threats SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy are -
Shortening product life cycle
– it is one of the major threat that Skf Bearings is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Skf Bearings 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
– Skf Bearings has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Skf Bearings 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.
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 Skf Bearings in the Organizational Development sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Skf Bearings 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.
Environmental challenges
– Skf Bearings 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. Skf Bearings can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Skf Bearings needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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 Skf Bearings.
Stagnating economy with rate increase
– Skf Bearings 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.
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. Skf Bearings can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Skf Bearings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Skf Bearings 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 SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy, Skf Bearings 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 SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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 SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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 SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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 SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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 SKF Bearings Series: Market Orientation Through Services (B): The Mission and Customer Strategy 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 Skf Bearings needs to make to build a sustainable competitive advantage.
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