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 household debt because of falling income levels, increasing energy prices, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, geopolitical disruptions, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , 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.
Effective Research and Development (R&D)
– Scher La 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Scher La is one of the leading recruiters in the industry. Managers in the Siemens: Building a Structure to Drive Performance and Responsibility (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Siemens: Building a Structure to Drive Performance and Responsibility (A) 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 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.
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.
Innovation driven organization
– Scher La is one of the most innovative firm in sector. Manager in Siemens: Building a Structure to Drive Performance and Responsibility (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
Learning organization
- Scher La 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 Scher La is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Siemens: Building a Structure to Drive Performance and Responsibility (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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 -
Need for greater diversity
– Scher La 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.
Increasing silos among functional specialists
– The organizational structure of Scher La is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Scher La needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Scher La to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Siemens: Building a Structure to Drive Performance and Responsibility (A) HBR case study mentions - Scher La 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.
Slow decision making process
– As mentioned earlier in the report, Scher La 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. Scher La 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.
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.
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Scher La supply chain. Even after few cautionary changes mentioned in the HBR case study - Siemens: Building a Structure to Drive Performance and Responsibility (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Scher La vulnerable to further global disruptions in South East Asia.
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 bargaining power of channel partners
– Because of the regulatory requirements, Jesper Sorensen, Sara Gaviser Leslie suggests that, Scher La 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.
Skills based hiring
– The stress on hiring functional specialists at Scher La 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.
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 -
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.
Manufacturing automation
– Scher La 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.
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.
Better consumer reach
– The expansion of the 5G network will help Scher La to increase its market reach. Scher La 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Scher La 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.
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.
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.
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.
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.
Developing new processes and practices
– Scher La 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.
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.
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.
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 -
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.
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. Scher La 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.
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 Scher La business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Scher La.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Scher La 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 Siemens: Building a Structure to Drive Performance and Responsibility (A) .
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.
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.
Increasing wage structure of Scher La
– 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 Scher La.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– 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.
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.
