Case Study Description of ABB Deutschland (Abridged)
Focuses in detail on implementing a corporate restructuring program in ABB's German subsidiary. Special attention is given to Germany's unique form of industrial governance. Two major problem areas--power plants and power transformers--are described in detail. ABB's new policies, in terms of strategy, organization, behavior, and financial targets, are portrayed. How should the head of ABB Germany proceed? Will the new ABB policies clash with Germany's national and BBC's corporate culture? Why are power plants and power transformers in deep trouble and what action can be taken? Does decentralization of the salesforce make sense? What are the challenges, opportunities, and risks facing ABB's Germany country head? Will the new international matrix be a help or a hindrance?
Swot Analysis of "ABB Deutschland (Abridged)" written by Christopher A. Bartlett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abb's Abb facing as an external strategic factors. Some of the topics covered in ABB Deutschland (Abridged) case study are - Strategic Management Strategies, International business, Leadership, Operations management, Organizational culture, Reorganization, Sales and Organizational Development.
Some of the macro environment factors that can be used to understand the ABB Deutschland (Abridged) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, technology disruption, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices,
increasing commodity prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of ABB Deutschland (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ABB Deutschland (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abb's Abb, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abb's Abb operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of ABB Deutschland (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in ABB Deutschland (Abridged) case study
2. Improving business portfolio management of Abb's Abb
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Abb's Abb
Strengths ABB Deutschland (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abb's Abb in ABB Deutschland (Abridged) Harvard Business Review case study are -
Highly skilled collaborators
– Abb's Abb has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in ABB Deutschland (Abridged) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Abb's Abb is present in almost all the verticals within the industry. This has provided firm in ABB Deutschland (Abridged) 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.
Low bargaining power of suppliers
– Suppliers of Abb's Abb in the sector have low bargaining power. ABB Deutschland (Abridged) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abb's Abb to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Abb's Abb has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ABB Deutschland (Abridged) 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.
Ability to recruit top talent
– Abb's Abb is one of the leading recruiters in the industry. Managers in the ABB Deutschland (Abridged) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Abb's Abb in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Abb's Abb is one of the most innovative firm in sector. Manager in ABB Deutschland (Abridged) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Abb's Abb has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Abb's Abb to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Abb's Abb digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Abb's Abb 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.
Ability to lead change in Organizational Development field
– Abb's Abb is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Abb's Abb in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Abb's Abb 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 Christopher A. Bartlett 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.
Sustainable margins compare to other players in Organizational Development industry
– ABB Deutschland (Abridged) firm has clearly differentiated products in the market place. This has enabled Abb's Abb to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Abb's Abb to invest into research and development (R&D) and innovation.
Weaknesses ABB Deutschland (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ABB Deutschland (Abridged) are -
Skills based hiring
– The stress on hiring functional specialists at Abb's Abb 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.
Low market penetration in new markets
– Outside its home market of Abb's Abb, firm in the HBR case study ABB Deutschland (Abridged) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ABB Deutschland (Abridged), is just above the industry average. Abb's Abb 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.
No frontier risks strategy
– After analyzing the HBR case study ABB Deutschland (Abridged), 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.
Capital Spending Reduction
– Even during the low interest decade, Abb's Abb has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Interest costs
– Compare to the competition, Abb's Abb 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ABB Deutschland (Abridged), in the dynamic environment Abb's Abb has struggled to respond to the nimble upstart competition. Abb's Abb has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Abb's Abb 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.
Slow to strategic competitive environment developments
– As ABB Deutschland (Abridged) HBR case study mentions - Abb's Abb 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.
Increasing silos among functional specialists
– The organizational structure of Abb's Abb is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Abb's Abb needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abb's Abb to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study ABB Deutschland (Abridged) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Abb's Abb 's lucrative customers.
Opportunities ABB Deutschland (Abridged) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study ABB Deutschland (Abridged) are -
Developing new processes and practices
– Abb's Abb 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abb's Abb can use these opportunities to build new business models that can help the communities that Abb's Abb operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Manufacturing automation
– Abb's Abb 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.
Building a culture of innovation
– managers at Abb's Abb 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Abb's Abb 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
– Abb's Abb 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Abb's Abb is facing challenges because of the dominance of functional experts in the organization. ABB Deutschland (Abridged) 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.
Using analytics as competitive advantage
– Abb's Abb has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study ABB Deutschland (Abridged) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Abb's Abb to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Abb's Abb has opened avenues for new revenue streams for the organization in the industry. This can help Abb's Abb to build a more holistic ecosystem as suggested in the ABB Deutschland (Abridged) case study. Abb's Abb can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Abb's Abb can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Abb's Abb 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.
Better consumer reach
– The expansion of the 5G network will help Abb's Abb to increase its market reach. Abb's Abb 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.
Buying journey improvements
– Abb's Abb can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ABB Deutschland (Abridged) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats ABB Deutschland (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ABB Deutschland (Abridged) are -
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Abb's Abb can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Abb's Abb has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Abb's Abb 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.
Regulatory challenges
– Abb's Abb 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Abb's Abb 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 Abb's Abb 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ABB Deutschland (Abridged), Abb's Abb 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 .
Shortening product life cycle
– it is one of the major threat that Abb's Abb is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Abb's Abb business can come under increasing regulations regarding data privacy, data security, etc.
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 Abb's Abb in the Organizational Development sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Abb's Abb with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Abb's Abb
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Abb's Abb.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Abb's Abb 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 Abb's Abb.
Weighted SWOT Analysis of ABB Deutschland (Abridged) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study ABB Deutschland (Abridged) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study ABB Deutschland (Abridged) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study ABB Deutschland (Abridged) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of ABB Deutschland (Abridged) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Abb's Abb needs to make to build a sustainable competitive advantage.