Case Study Description of Cumberland Metal Industries: Engineered Products Division--1980
Cumberland Metal Industries has developed a new product to help contractors drive piles faster. They are trying to decide how to price it. Provides substantial information on the industry, competition, etc. Students must decide what factors are relevant in making an industrial pricing decision. Decisions must also be made about promotion and distribution channels. Software for this case is available (9-589-528).
Swot Analysis of "Cumberland Metal Industries: Engineered Products Division--1980" written by Benson P. Shapiro, Jeffrey J. Sherman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cumberland Metal facing as an external strategic factors. Some of the topics covered in Cumberland Metal Industries: Engineered Products Division--1980 case study are - Strategic Management Strategies, Manufacturing, Marketing, Pricing, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Cumberland Metal Industries: Engineered Products Division--1980 casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
increasing household debt because of falling income levels, wage bills are increasing, etc
Introduction to SWOT Analysis of Cumberland Metal Industries: Engineered Products Division--1980
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cumberland Metal Industries: Engineered Products Division--1980 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cumberland Metal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cumberland Metal 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 Cumberland Metal Industries: Engineered Products Division--1980 can be done for the following purposes –
1. Strategic planning using facts provided in Cumberland Metal Industries: Engineered Products Division--1980 case study
2. Improving business portfolio management of Cumberland Metal
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cumberland Metal
Strengths Cumberland Metal Industries: Engineered Products Division--1980 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cumberland Metal in Cumberland Metal Industries: Engineered Products Division--1980 Harvard Business Review case study are -
Learning organization
- Cumberland Metal 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 Cumberland Metal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cumberland Metal Industries: Engineered Products Division--1980 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Cumberland Metal is present in almost all the verticals within the industry. This has provided firm in Cumberland Metal Industries: Engineered Products Division--1980 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.
Organizational Resilience of Cumberland Metal
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cumberland Metal does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Sales & Marketing field
– Cumberland Metal 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 Cumberland Metal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Cumberland Metal 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 Cumberland Metal Industries: Engineered Products Division--1980 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Cumberland Metal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cumberland Metal 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.
Operational resilience
– The operational resilience strategy in the Cumberland Metal Industries: Engineered Products Division--1980 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.
Superior customer experience
– The customer experience strategy of Cumberland Metal in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Cumberland Metal has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cumberland Metal Industries: Engineered Products Division--1980 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Cumberland Metal Industries: Engineered Products Division--1980 firm has clearly differentiated products in the market place. This has enabled Cumberland Metal to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Cumberland Metal to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Cumberland Metal in the sector have low bargaining power. Cumberland Metal Industries: Engineered Products Division--1980 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cumberland Metal to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Cumberland Metal 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 Cumberland Metal Industries: Engineered Products Division--1980 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Cumberland Metal Industries: Engineered Products Division--1980 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cumberland Metal Industries: Engineered Products Division--1980 are -
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 Cumberland Metal supply chain. Even after few cautionary changes mentioned in the HBR case study - Cumberland Metal Industries: Engineered Products Division--1980, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cumberland Metal vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Cumberland Metal 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cumberland Metal Industries: Engineered Products Division--1980 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cumberland Metal has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Cumberland Metal Industries: Engineered Products Division--1980 HBR case study mentions - Cumberland Metal 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.
Low market penetration in new markets
– Outside its home market of Cumberland Metal, firm in the HBR case study Cumberland Metal Industries: Engineered Products Division--1980 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Cumberland Metal 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. Cumberland Metal 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cumberland Metal Industries: Engineered Products Division--1980, is just above the industry average. Cumberland Metal 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 Cumberland Metal Industries: Engineered Products Division--1980, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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 operating costs
– Compare to the competitors, firm in the HBR case study Cumberland Metal Industries: Engineered Products Division--1980 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 Cumberland Metal 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cumberland Metal is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cumberland Metal Industries: Engineered Products Division--1980 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Cumberland Metal 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 - Cumberland Metal Industries: Engineered Products Division--1980 should strive to include more intangible value offerings along with its core products and services.
Opportunities Cumberland Metal Industries: Engineered Products Division--1980 | 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 Cumberland Metal Industries: Engineered Products Division--1980 are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cumberland Metal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cumberland Metal 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. Cumberland Metal 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.
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 Cumberland Metal 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.
Loyalty marketing
– Cumberland Metal 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.
Creating value in data economy
– The success of analytics program of Cumberland Metal has opened avenues for new revenue streams for the organization in the industry. This can help Cumberland Metal to build a more holistic ecosystem as suggested in the Cumberland Metal Industries: Engineered Products Division--1980 case study. Cumberland Metal can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Cumberland Metal can use these opportunities to build new business models that can help the communities that Cumberland Metal operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cumberland Metal is facing challenges because of the dominance of functional experts in the organization. Cumberland Metal Industries: Engineered Products Division--1980 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cumberland Metal in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Cumberland Metal can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Cumberland Metal can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cumberland Metal Industries: Engineered Products Division--1980 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, Cumberland Metal 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.
Building a culture of innovation
– managers at Cumberland Metal 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 Sales & Marketing segment.
Learning at scale
– Online learning technologies has now opened space for Cumberland Metal 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 Cumberland Metal Industries: Engineered Products Division--1980 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cumberland Metal Industries: Engineered Products Division--1980 are -
Regulatory challenges
– Cumberland Metal 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 Sales & Marketing industry regulations.
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. Cumberland Metal 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cumberland Metal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Cumberland Metal business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cumberland Metal can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Cumberland Metal 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.
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.
Environmental challenges
– Cumberland Metal 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. Cumberland Metal can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cumberland Metal 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 Cumberland Metal Industries: Engineered Products Division--1980 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cumberland Metal in the Sales & Marketing industry. The Sales & Marketing 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.
High dependence on third party suppliers
– Cumberland Metal high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Cumberland Metal 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.
Increasing wage structure of Cumberland Metal
– 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 Cumberland Metal.
Weighted SWOT Analysis of Cumberland Metal Industries: Engineered Products Division--1980 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 Cumberland Metal Industries: Engineered Products Division--1980 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 Cumberland Metal Industries: Engineered Products Division--1980 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 Cumberland Metal Industries: Engineered Products Division--1980 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 Cumberland Metal Industries: Engineered Products Division--1980 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 Cumberland Metal needs to make to build a sustainable competitive advantage.
