Case Study Description of The F/A-18 F404 Engine: Getting Lean (A)
This is a Darden case study.The U.S. Navy Aircraft Intermediate Maintenance Depot (AIMD) Lemoore Power Plants Division (F404 engine maintenance) was a real mess. Not-Ready-For-Issue parts were everywhere. Division through-put was poor (35 engines and 190 modules awaiting maintenance), there were 30 F/A-18 aircraft with bare firewalls (no engines), the maintenance crews were working 12-hour days, manning was at 61% of authorized levels, reenlistment rates were an abysmal 50%, and crew morale was lousy. And more parts and engines arrived in daily. The Officer-in-Charge of the Aircraft Intermediate Maintenance Detachment decided to use Lean manufacturing to tackle the challenge. It would be the first application of the Lean concept to Naval Aviation.
Authors :: Thomas Cross, E. Richard Brownlee II, Robert Osterhoudt, Jeff Pottinger
Swot Analysis of "The F/A-18 F404 Engine: Getting Lean (A)" 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 Maintenance F404 facing as an external strategic factors. Some of the topics covered in The F/A-18 F404 Engine: Getting Lean (A) case study are - Strategic Management Strategies, 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 (A) casestudy better are - – challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of The F/A-18 F404 Engine: Getting Lean (A)
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 (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Maintenance F404, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Maintenance F404 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 (A) can be done for the following purposes –
1. Strategic planning using facts provided in The F/A-18 F404 Engine: Getting Lean (A) case study
2. Improving business portfolio management of Maintenance F404
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 Maintenance F404
Strengths The F/A-18 F404 Engine: Getting Lean (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Maintenance F404 in The F/A-18 F404 Engine: Getting Lean (A) Harvard Business Review case study are -
Successful track record of launching new products
– Maintenance F404 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Maintenance F404 has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Organizational Development field
– Maintenance F404 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 Maintenance F404 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Maintenance F404 is one of the most innovative firm in sector. Manager in The F/A-18 F404 Engine: Getting Lean (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Maintenance F404 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Maintenance F404 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Maintenance F404 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Maintenance F404 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)
– Maintenance F404 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 (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.
Low bargaining power of suppliers
– Suppliers of Maintenance F404 in the sector have low bargaining power. The F/A-18 F404 Engine: Getting Lean (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Maintenance F404 to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Maintenance F404
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Maintenance F404 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Maintenance F404 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Maintenance F404 is present in almost all the verticals within the industry. This has provided firm in The F/A-18 F404 Engine: Getting Lean (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.
Ability to recruit top talent
– Maintenance F404 is one of the leading recruiters in the industry. Managers in the The F/A-18 F404 Engine: Getting Lean (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.
Weaknesses The F/A-18 F404 Engine: Getting Lean (A) | 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 (A) are -
Workers concerns about automation
– As automation is fast increasing in the segment, Maintenance F404 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.
Capital Spending Reduction
– Even during the low interest decade, Maintenance F404 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.
No frontier risks strategy
– After analyzing the HBR case study The F/A-18 F404 Engine: Getting Lean (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, Thomas Cross, E. Richard Brownlee II, Robert Osterhoudt, Jeff Pottinger suggests that, Maintenance F404 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.
Slow to strategic competitive environment developments
– As The F/A-18 F404 Engine: Getting Lean (A) HBR case study mentions - Maintenance F404 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The F/A-18 F404 Engine: Getting Lean (A), it seems that the employees of Maintenance F404 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.
Products dominated business model
– Even though Maintenance F404 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 (A) should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Maintenance F404 is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Maintenance F404 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Maintenance F404 to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Maintenance F404 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. Maintenance F404 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 Maintenance F404 products
– To increase the profitability and margins on the products, Maintenance F404 needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Maintenance F404 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.
Opportunities The F/A-18 F404 Engine: Getting Lean (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 The F/A-18 F404 Engine: Getting Lean (A) are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Maintenance F404 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.
Developing new processes and practices
– Maintenance F404 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.
Leveraging digital technologies
– Maintenance F404 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Maintenance F404 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 Maintenance F404 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 Maintenance F404 to increase its market reach. Maintenance F404 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Maintenance F404 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 (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Maintenance F404 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The F/A-18 F404 Engine: Getting Lean (A) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Maintenance F404 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 Maintenance F404 to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Maintenance F404 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.
Creating value in data economy
– The success of analytics program of Maintenance F404 has opened avenues for new revenue streams for the organization in the industry. This can help Maintenance F404 to build a more holistic ecosystem as suggested in the The F/A-18 F404 Engine: Getting Lean (A) case study. Maintenance F404 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Maintenance F404 in the consumer business. Now Maintenance F404 can target international markets with far fewer capital restrictions requirements than the existing system.
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. Maintenance F404 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. Maintenance F404 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.
Threats The F/A-18 F404 Engine: Getting Lean (A) 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 (A) are -
Increasing wage structure of Maintenance F404
– 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 Maintenance F404.
Stagnating economy with rate increase
– Maintenance F404 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Maintenance F404 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 (A), Maintenance F404 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Maintenance F404 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.
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. Maintenance F404 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Maintenance F404 in the Organizational Development sector and impact the bottomline of the organization.
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.
Regulatory challenges
– Maintenance F404 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.
Environmental challenges
– Maintenance F404 needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Maintenance F404 can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Technology acceleration in Forth Industrial Revolution
– Maintenance F404 has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Maintenance F404 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Maintenance F404 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 (A) .
Weighted SWOT Analysis of The F/A-18 F404 Engine: Getting Lean (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 The F/A-18 F404 Engine: Getting Lean (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 The F/A-18 F404 Engine: Getting Lean (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 The F/A-18 F404 Engine: Getting Lean (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 The F/A-18 F404 Engine: Getting Lean (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 Maintenance F404 needs to make to build a sustainable competitive advantage.
