Siemens: Building a Structure to Drive Performance and Responsibility (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Siemens: Building a Structure to Drive Performance and Responsibility (A)
Peter LA?scher became CEO of Siemens in July, 2007. It was one of the most turbulent times in the company's history as the company was reeling from a compliance scandal involving hundreds of millions of Euros in suspected bribes, and had to pay billions of Euros in fines and fees to clear its name. Further, the company's operating groups were underperforming their peers in terms of profitability, and had been for some time. Adding to the challenges, LA?scher was the first outsider to run Siemens since the company's founding in 1847. After his arrival, LA?scher moved quickly to assess the organization, a global, multi-line technology and engineering firm with over 475,000 employees and over a??66,487 million of revenue and a??3,345 million of net income. Klaus Kleinfeld, the previous CEO, had improved company performance, driven the company to become more globally focused, and sold off underperforming and non-core assets. However, his tenure was cut short by the bribery scandal. When LA?scher arrived, he felt the company was overly complex, individuals lacked accountability and significant tension existed between headquarters and the regions. LA?scher took advantage of the crisis to reorganize the company from 10 operating groups to 3 sectors, introduce regional clusters to enable smaller markets to focus on sales, establish the "right of way" of the global business, simplify financial reporting, and enhance the sales effort to market verticals. In addition to the changes that LA?scher made to the company structure, he transformed employees' attitudes and renewed the entrepreneurial and innovative spirit among managers in the organization.
Swot Analysis of "Siemens: Building a Structure to Drive Performance and Responsibility (A)" written by Jesper Sorensen, Sara Gaviser Leslie includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Scher La facing as an external strategic factors. Some of the topics covered in Siemens: Building a Structure to Drive Performance and Responsibility (A) case study are - Strategic Management Strategies, Decision making, International business, Leadership, Leadership development, Organizational culture, Organizational structure, Sales, Technology and Organizational Development.
Some of the macro environment factors that can be used to understand the Siemens: Building a Structure to Drive Performance and Responsibility (A) casestudy better are - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc
Introduction to SWOT Analysis of Siemens: Building a Structure to Drive Performance and Responsibility (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Siemens: Building a Structure to Drive Performance and Responsibility (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Scher La, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Scher La 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) can be done for the following purposes –
1. Strategic planning using facts provided in Siemens: Building a Structure to Drive Performance and Responsibility (A) case study
2. Improving business portfolio management of Scher La
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 Scher La
Strengths Siemens: Building a Structure to Drive Performance and Responsibility (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Scher La in Siemens: Building a Structure to Drive Performance and Responsibility (A) Harvard Business Review case study are -
High switching costs
– The high switching costs that Scher La 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.
Successful track record of launching new products
– Scher La has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Scher La 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 Scher La
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Scher La does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Scher La is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Scher La 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Organizational Development field
– Scher La 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 Scher La in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Organizational Development industry
– Siemens: Building a Structure to Drive Performance and Responsibility (A) firm has clearly differentiated products in the market place. This has enabled Scher La to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Scher La to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Scher La is present in almost all the verticals within the industry. This has provided firm in Siemens: Building a Structure to Drive Performance and Responsibility (A) 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.
Analytics focus
– Scher La 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 Jesper Sorensen, Sara Gaviser Leslie 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.
Training and development
– Scher La has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Siemens: Building a Structure to Drive Performance and Responsibility (A) 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Scher La digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Scher La 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.
Low bargaining power of suppliers
– Suppliers of Scher La in the sector have low bargaining power. Siemens: Building a Structure to Drive Performance and Responsibility (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Scher La to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Siemens: Building a Structure to Drive Performance and Responsibility (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Siemens: Building a Structure to Drive Performance and Responsibility (A) are -
Aligning sales with marketing
– It come across in the case study Siemens: Building a Structure to Drive Performance and Responsibility (A) 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) can leverage the sales team experience to cultivate customer relationships as Scher La is planning to shift buying processes online.
Lack of clear differentiation of Scher La products
– To increase the profitability and margins on the products, Scher La needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Siemens: Building a Structure to Drive Performance and Responsibility (A), is just above the industry average. Scher La 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Scher La 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Siemens: Building a Structure to Drive Performance and Responsibility (A), it seems that the employees of Scher La 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 Scher La, firm in the HBR case study Siemens: Building a Structure to Drive Performance and Responsibility (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Scher La 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.
No frontier risks strategy
– After analyzing the HBR case study Siemens: Building a Structure to Drive Performance and Responsibility (A), 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Siemens: Building a Structure to Drive Performance and Responsibility (A) 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 Scher La has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Scher La 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) 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 Scher La 's lucrative customers.
Opportunities Siemens: Building a Structure to Drive Performance and Responsibility (A) | 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Scher La 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.
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 Scher La 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.
Creating value in data economy
– The success of analytics program of Scher La has opened avenues for new revenue streams for the organization in the industry. This can help Scher La to build a more holistic ecosystem as suggested in the Siemens: Building a Structure to Drive Performance and Responsibility (A) case study. Scher La can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Scher La 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.
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. Scher La can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Scher La can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Scher La 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 Scher La to hire the very best people irrespective of their geographical location.
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 Scher La in the consumer business. Now Scher La can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Scher La 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Scher La to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Scher La 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.
Learning at scale
– Online learning technologies has now opened space for Scher La to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Scher La is facing challenges because of the dominance of functional experts in the organization. Siemens: Building a Structure to Drive Performance and Responsibility (A) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Scher La can use these opportunities to build new business models that can help the communities that Scher La operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Threats Siemens: Building a Structure to Drive Performance and Responsibility (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Siemens: Building a Structure to Drive Performance and Responsibility (A) are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Siemens: Building a Structure to Drive Performance and Responsibility (A), Scher La 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 .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Scher La with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Scher La 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.
Stagnating economy with rate increase
– Scher La 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Scher La 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.
Consumer confidence and its impact on Scher La 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.
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 Scher La in the Organizational Development sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Scher La has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Scher La 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.
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. Scher La can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Scher La 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.
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. Scher La needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Siemens: Building a Structure to Drive Performance and Responsibility (A) 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) 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 Scher La needs to make to build a sustainable competitive advantage.