Siemens Electric Motor Works (A): Process-Oriented Costing SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Siemens Electric Motor Works (A): Process-Oriented Costing
Explores how a cost system can help support a firm's decision to change strategies. In the process, the students are introduced to a simple activity-based cost system. Siemens Electric Motor Works found itself facing an increasingly competitive environment and so made a decision to move from mass production of specialty motors to the production of small lots of custom motors. In doing so, they found their old cost system led them to poor decision making. By switching to a simple activity-based system, more accurate product costs were computed, facilitating better divisional performance.
Swot Analysis of "Siemens Electric Motor Works (A): Process-Oriented Costing" written by Robin Cooper, Karen H. Wruck includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Siemens System facing as an external strategic factors. Some of the topics covered in Siemens Electric Motor Works (A): Process-Oriented Costing case study are - Strategic Management Strategies, Costs, Manufacturing, Strategy execution and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Siemens Electric Motor Works (A): Process-Oriented Costing casestudy better are - – geopolitical disruptions, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, etc
Introduction to SWOT Analysis of Siemens Electric Motor Works (A): Process-Oriented Costing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Siemens Electric Motor Works (A): Process-Oriented Costing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Siemens System, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Siemens System 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 Siemens Electric Motor Works (A): Process-Oriented Costing can be done for the following purposes –
1. Strategic planning using facts provided in Siemens Electric Motor Works (A): Process-Oriented Costing case study
2. Improving business portfolio management of Siemens System
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Siemens System
Strengths Siemens Electric Motor Works (A): Process-Oriented Costing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Siemens System in Siemens Electric Motor Works (A): Process-Oriented Costing Harvard Business Review case study are -
Highly skilled collaborators
– Siemens System 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 Siemens Electric Motor Works (A): Process-Oriented Costing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Finance & Accounting field
– Siemens System 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 Siemens System in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Siemens Electric Motor Works (A): Process-Oriented Costing 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.
Learning organization
- Siemens System 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 Siemens System is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Siemens Electric Motor Works (A): Process-Oriented Costing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Siemens System in the sector have low bargaining power. Siemens Electric Motor Works (A): Process-Oriented Costing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Siemens System to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Siemens System has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Siemens System 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.
Diverse revenue streams
– Siemens System is present in almost all the verticals within the industry. This has provided firm in Siemens Electric Motor Works (A): Process-Oriented Costing 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
– Siemens System is one of the leading recruiters in the industry. Managers in the Siemens Electric Motor Works (A): Process-Oriented Costing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Siemens System has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Siemens Electric Motor Works (A): Process-Oriented Costing 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.
High switching costs
– The high switching costs that Siemens System 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.
Organizational Resilience of Siemens System
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Siemens System 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 Siemens System in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Siemens Electric Motor Works (A): Process-Oriented Costing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Siemens Electric Motor Works (A): Process-Oriented Costing are -
Lack of clear differentiation of Siemens System products
– To increase the profitability and margins on the products, Siemens System needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Siemens System is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Siemens System needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Siemens System to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Siemens System 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. Siemens System 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.
Need for greater diversity
– Siemens System 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.
Low market penetration in new markets
– Outside its home market of Siemens System, firm in the HBR case study Siemens Electric Motor Works (A): Process-Oriented Costing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Siemens Electric Motor Works (A): Process-Oriented Costing HBR case study mentions - Siemens System 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.
Aligning sales with marketing
– It come across in the case study Siemens Electric Motor Works (A): Process-Oriented Costing that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Siemens Electric Motor Works (A): Process-Oriented Costing can leverage the sales team experience to cultivate customer relationships as Siemens System is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Siemens System 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.
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 Siemens System supply chain. Even after few cautionary changes mentioned in the HBR case study - Siemens Electric Motor Works (A): Process-Oriented Costing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Siemens System vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Siemens Electric Motor Works (A): Process-Oriented Costing, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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 cash cycle compare to competitors
Siemens System 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.
Opportunities Siemens Electric Motor Works (A): Process-Oriented Costing | 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 Siemens Electric Motor Works (A): Process-Oriented Costing are -
Loyalty marketing
– Siemens System 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Siemens System can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Siemens System can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Siemens System has opened avenues for new revenue streams for the organization in the industry. This can help Siemens System to build a more holistic ecosystem as suggested in the Siemens Electric Motor Works (A): Process-Oriented Costing case study. Siemens System can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Siemens System can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at Siemens System 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 Finance & Accounting segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Siemens System is facing challenges because of the dominance of functional experts in the organization. Siemens Electric Motor Works (A): Process-Oriented Costing 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.
Better consumer reach
– The expansion of the 5G network will help Siemens System to increase its market reach. Siemens System 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.
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. Siemens System can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Siemens System 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.
Using analytics as competitive advantage
– Siemens System has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Siemens Electric Motor Works (A): Process-Oriented Costing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Siemens System to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Siemens System can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Siemens Electric Motor Works (A): Process-Oriented Costing 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.
Developing new processes and practices
– Siemens System can develop new processes and procedures in Finance & Accounting 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.
Threats Siemens Electric Motor Works (A): Process-Oriented Costing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Siemens Electric Motor Works (A): Process-Oriented Costing are -
Consumer confidence and its impact on Siemens System demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Siemens Electric Motor Works (A): Process-Oriented Costing, Siemens System may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Regulatory challenges
– Siemens System 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 Finance & Accounting industry regulations.
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.
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. Siemens System needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
High dependence on third party suppliers
– Siemens System 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. Siemens System 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.
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 Siemens System in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Siemens System has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Siemens System needs to keep up with the evolution of technology in the Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Siemens System 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 Siemens System business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Siemens System can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Siemens Electric Motor Works (A): Process-Oriented Costing 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 Siemens Electric Motor Works (A): Process-Oriented Costing 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 Siemens Electric Motor Works (A): Process-Oriented Costing 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 Siemens Electric Motor Works (A): Process-Oriented Costing 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 Siemens Electric Motor Works (A): Process-Oriented Costing 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 Siemens System needs to make to build a sustainable competitive advantage.
