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 - – increasing household debt because of falling income levels, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization,
increasing energy prices, 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 -
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.
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.
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.
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.
High switching costs
– The high switching costs that Cumberland Metal 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)
– 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.
Innovation driven organization
– Cumberland Metal is one of the most innovative firm in sector. Manager in Cumberland Metal Industries: Engineered Products Division--1980 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
– Cumberland Metal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cumberland Metal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Cumberland Metal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cumberland Metal 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.
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.
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.
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 -
Lack of clear differentiation of Cumberland Metal products
– To increase the profitability and margins on the products, Cumberland Metal needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cumberland Metal Industries: Engineered Products Division--1980, in the dynamic environment Cumberland Metal has struggled to respond to the nimble upstart competition. Cumberland Metal 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
– Cumberland Metal 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cumberland Metal Industries: Engineered Products Division--1980, it seems that the employees of Cumberland Metal 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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Benson P. Shapiro, Jeffrey J. Sherman suggests that, Cumberland Metal 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 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.
Skills based hiring
– The stress on hiring functional specialists at Cumberland Metal 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.
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 -
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.
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. Cumberland Metal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Leveraging digital technologies
– Cumberland Metal 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cumberland Metal 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 Cumberland Metal to hire the very best people irrespective of their geographical location.
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.
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.
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.
Manufacturing automation
– Cumberland Metal can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cumberland Metal 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, Cumberland Metal Industries: Engineered Products Division--1980, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
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.
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.
Shortening product life cycle
– it is one of the major threat that Cumberland Metal is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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 Cumberland Metal.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cumberland Metal Industries: Engineered Products Division--1980, Cumberland Metal may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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.
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.
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.