Swot Analysis of "SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing" written by Sandra Vandermerwe, Marika Taishoff includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Upswing Skf facing as an external strategic factors. Some of the topics covered in SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing 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 (C): Results and the Upswing casestudy better are - – increasing energy prices, wage bills are increasing, technology disruption, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic ,
increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing
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 (C): Results and the Upswing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Upswing Skf, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Upswing Skf 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 (C): Results and the Upswing can be done for the following purposes –
1. Strategic planning using facts provided in SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing case study
2. Improving business portfolio management of Upswing Skf
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 Upswing Skf
Strengths SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Upswing Skf in SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing Harvard Business Review case study are -
Sustainable margins compare to other players in Organizational Development industry
– SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing firm has clearly differentiated products in the market place. This has enabled Upswing Skf to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Upswing Skf to invest into research and development (R&D) and innovation.
Innovation driven organization
– Upswing Skf is one of the most innovative firm in sector. Manager in SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Upswing Skf 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 SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Upswing Skf in the sector have low bargaining power. SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Upswing Skf to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Upswing Skf 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 SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Upswing Skf 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 Upswing Skf is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Upswing Skf is present in almost all the verticals within the industry. This has provided firm in SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing 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.
High brand equity
– Upswing Skf has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Upswing Skf to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing 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.
Organizational Resilience of Upswing Skf
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Upswing Skf does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Upswing Skf has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Upswing Skf 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.
Ability to recruit top talent
– Upswing Skf is one of the leading recruiters in the industry. Managers in the SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing are -
Products dominated business model
– Even though Upswing Skf has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing should strive to include more intangible value offerings along with its core products and services.
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 (C): Results and the Upswing 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 Upswing Skf has relatively successful track record of launching new products.
Lack of clear differentiation of Upswing Skf products
– To increase the profitability and margins on the products, Upswing Skf needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing HBR case study mentions - Upswing Skf 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing, is just above the industry average. Upswing Skf 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, Upswing Skf 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 (C): Results and the Upswing can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing 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 Upswing Skf 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Upswing Skf 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. Upswing Skf 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Sandra Vandermerwe, Marika Taishoff suggests that, Upswing Skf is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Need for greater diversity
– Upswing Skf 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing, in the dynamic environment Upswing Skf has struggled to respond to the nimble upstart competition. Upswing Skf has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing | 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 (C): Results and the Upswing are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Upswing Skf 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.
Loyalty marketing
– Upswing Skf 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.
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. Upswing Skf 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, Upswing Skf can use these opportunities to build new business models that can help the communities that Upswing Skf operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Developing new processes and practices
– Upswing Skf 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.
Better consumer reach
– The expansion of the 5G network will help Upswing Skf to increase its market reach. Upswing Skf 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.
Building a culture of innovation
– managers at Upswing Skf 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.
Leveraging digital technologies
– Upswing Skf 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Upswing Skf 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 (C): Results and the Upswing, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Upswing Skf 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. Upswing Skf 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Upswing Skf can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Upswing Skf in the consumer business. Now Upswing Skf can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Upswing Skf is facing challenges because of the dominance of functional experts in the organization. SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing 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.
Threats SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing 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 (C): Results and the Upswing are -
Environmental challenges
– Upswing Skf 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. Upswing Skf can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Technology acceleration in Forth Industrial Revolution
– Upswing Skf has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Upswing Skf 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.
Shortening product life cycle
– it is one of the major threat that Upswing Skf is facing in Organizational Development 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 Upswing Skf with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Upswing Skf 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.
Increasing wage structure of Upswing Skf
– 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 Upswing Skf.
High dependence on third party suppliers
– Upswing Skf 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.
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.
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 (C): Results and the Upswing, Upswing Skf 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 .
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 Upswing Skf in the Organizational Development sector and impact the bottomline of the organization.
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 Upswing Skf business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Upswing Skf 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Upswing Skf 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 (C): Results and the Upswing .
Weighted SWOT Analysis of SKF Bearings Series: Market Orientation Through Services (C): Results and the Upswing 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 (C): Results and the Upswing 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 (C): Results and the Upswing 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 (C): Results and the Upswing 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 (C): Results and the Upswing 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 Upswing Skf needs to make to build a sustainable competitive advantage.
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