Case Study Description of The F/A-18 F404 Engine: Getting Lean (B)
This is a Darden case study.After the successful implementation of Lean manufacturing concepts at U.S. Navy Aircraft Intermediate Maintenance Depot (AIMD) Lemoore, particularly with regard to the maintenance processes for the F404 engine on the F/A-18 Hornet, these concepts have became the standard by which production across all AIMDs are measured. Now assigned to NAVAIR, the person responsible for these changes is eager to apply the lessons of AIMD Lemoore across the entire NAVAIR Enterprise.
Authors :: Thomas Cross, E. Richard Brownlee II, Robert Osterhoudt, Jeff Pottinger
Swot Analysis of "The F/A-18 F404 Engine: Getting Lean (B)" written by Thomas Cross, E. Richard Brownlee II, Robert Osterhoudt, Jeff Pottinger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Navair Aimd facing as an external strategic factors. Some of the topics covered in The F/A-18 F404 Engine: Getting Lean (B) case study are - Strategic Management Strategies, Corporate governance, Costs, Operations management and Organizational Development.
Some of the macro environment factors that can be used to understand the The F/A-18 F404 Engine: Getting Lean (B) casestudy better are - – technology disruption, increasing household debt because of falling income levels, wage bills are increasing, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, challanges to central banks by blockchain based private currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of The F/A-18 F404 Engine: Getting Lean (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The F/A-18 F404 Engine: Getting Lean (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Navair Aimd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Navair Aimd 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 The F/A-18 F404 Engine: Getting Lean (B) can be done for the following purposes –
1. Strategic planning using facts provided in The F/A-18 F404 Engine: Getting Lean (B) case study
2. Improving business portfolio management of Navair Aimd
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 Navair Aimd
Strengths The F/A-18 F404 Engine: Getting Lean (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Navair Aimd in The F/A-18 F404 Engine: Getting Lean (B) Harvard Business Review case study are -
Diverse revenue streams
– Navair Aimd is present in almost all the verticals within the industry. This has provided firm in The F/A-18 F404 Engine: Getting Lean (B) 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.
Operational resilience
– The operational resilience strategy in the The F/A-18 F404 Engine: Getting Lean (B) 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.
Ability to lead change in Organizational Development field
– Navair Aimd 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 Navair Aimd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Navair Aimd has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The F/A-18 F404 Engine: Getting Lean (B) 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.
Effective Research and Development (R&D)
– Navair Aimd 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 The F/A-18 F404 Engine: Getting Lean (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Navair Aimd in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Organizational Development industry
– The F/A-18 F404 Engine: Getting Lean (B) firm has clearly differentiated products in the market place. This has enabled Navair Aimd to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Navair Aimd to invest into research and development (R&D) and innovation.
Learning organization
- Navair Aimd 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 Navair Aimd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The F/A-18 F404 Engine: Getting Lean (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Navair Aimd 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 Thomas Cross, E. Richard Brownlee II, Robert Osterhoudt, Jeff Pottinger 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.
High switching costs
– The high switching costs that Navair Aimd 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.
High brand equity
– Navair Aimd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Navair Aimd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Navair Aimd
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Navair Aimd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses The F/A-18 F404 Engine: Getting Lean (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The F/A-18 F404 Engine: Getting Lean (B) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The F/A-18 F404 Engine: Getting Lean (B), it seems that the employees of Navair Aimd 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.
Slow decision making process
– As mentioned earlier in the report, Navair Aimd 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. Navair Aimd 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.
No frontier risks strategy
– After analyzing the HBR case study The F/A-18 F404 Engine: Getting Lean (B), 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.
Interest costs
– Compare to the competition, Navair Aimd 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 cash cycle compare to competitors
Navair Aimd 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.
Products dominated business model
– Even though Navair Aimd 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 - The F/A-18 F404 Engine: Getting Lean (B) should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Navair Aimd 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.
Skills based hiring
– The stress on hiring functional specialists at Navair Aimd 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas Cross, E. Richard Brownlee II, Robert Osterhoudt, Jeff Pottinger suggests that, Navair Aimd 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.
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 Navair Aimd supply chain. Even after few cautionary changes mentioned in the HBR case study - The F/A-18 F404 Engine: Getting Lean (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Navair Aimd vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Navair Aimd products
– To increase the profitability and margins on the products, Navair Aimd needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities The F/A-18 F404 Engine: Getting Lean (B) | 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 The F/A-18 F404 Engine: Getting Lean (B) are -
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 Navair Aimd in the consumer business. Now Navair Aimd can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Navair Aimd can use these opportunities to build new business models that can help the communities that Navair Aimd operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Navair Aimd 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 Navair Aimd to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Navair Aimd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Navair Aimd 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.
Better consumer reach
– The expansion of the 5G network will help Navair Aimd to increase its market reach. Navair Aimd 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
– Navair Aimd can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The F/A-18 F404 Engine: Getting Lean (B) 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Navair Aimd 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.
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. Navair Aimd 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. Navair Aimd 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.
Creating value in data economy
– The success of analytics program of Navair Aimd has opened avenues for new revenue streams for the organization in the industry. This can help Navair Aimd to build a more holistic ecosystem as suggested in the The F/A-18 F404 Engine: Getting Lean (B) case study. Navair Aimd can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Navair Aimd 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, The F/A-18 F404 Engine: Getting Lean (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Navair Aimd 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.
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. Navair Aimd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats The F/A-18 F404 Engine: Getting Lean (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The F/A-18 F404 Engine: Getting Lean (B) are -
Regulatory challenges
– Navair Aimd 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 dependence on third party suppliers
– Navair Aimd 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. Navair Aimd 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.
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.
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 Navair Aimd business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Navair Aimd 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.
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. Navair Aimd needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The F/A-18 F404 Engine: Getting Lean (B), Navair Aimd 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Navair Aimd 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 The F/A-18 F404 Engine: Getting Lean (B) .
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 Navair Aimd.
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.
Shortening product life cycle
– it is one of the major threat that Navair Aimd is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Navair Aimd
– 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 Navair Aimd.
Weighted SWOT Analysis of The F/A-18 F404 Engine: Getting Lean (B) 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 The F/A-18 F404 Engine: Getting Lean (B) 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 The F/A-18 F404 Engine: Getting Lean (B) 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 The F/A-18 F404 Engine: Getting Lean (B) 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 The F/A-18 F404 Engine: Getting Lean (B) 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 Navair Aimd needs to make to build a sustainable competitive advantage.