The president of Ohmeda, a wholly owned company of the BOC Group, plans to grow the company's medical equipment sales from $95 million in 1985 to $158 million in five years by focusing on the sale of "high-tech" equipment. At the same time, the president expects to sell Ohmeda's medical supplies business ($22 million in sales) and to transfer its medical gases business ($27.2 million in sales) to another business unit of the BOC Group. The changes in Ohmeda's products combined with the planned growth in medical equipment cause the president to reassess Ohmeda's marketing system. The new strategic thrust requires him to review the role of Ohmeda's direct sales and dealer sales coverage. In doing so he evaluates the economics of three options: 1) continuing with Ohmeda's present system, 2) eliminating dealer sales coverage, and 3) specializing salespeople by product group.
Swot Analysis of "BOC Group: Ohmeda (A)" written by Rowland T. Moriarty Jr., Gordon Swartz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ohmeda's Boc facing as an external strategic factors. Some of the topics covered in BOC Group: Ohmeda (A) case study are - Strategic Management Strategies, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the BOC Group: Ohmeda (A) casestudy better are - – wage bills are increasing, geopolitical disruptions, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of BOC Group: Ohmeda (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BOC Group: Ohmeda (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ohmeda's Boc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ohmeda's Boc 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 BOC Group: Ohmeda (A) can be done for the following purposes –
1. Strategic planning using facts provided in BOC Group: Ohmeda (A) case study
2. Improving business portfolio management of Ohmeda's Boc
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 Ohmeda's Boc
Strengths BOC Group: Ohmeda (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ohmeda's Boc in BOC Group: Ohmeda (A) Harvard Business Review case study are -
Organizational Resilience of Ohmeda's Boc
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ohmeda's Boc 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 Ohmeda's Boc in the sector have low bargaining power. BOC Group: Ohmeda (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ohmeda's Boc to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Ohmeda's Boc 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.
Ability to lead change in Sales & Marketing field
– Ohmeda's Boc 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 Ohmeda's Boc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Ohmeda's Boc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Ohmeda's Boc 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 BOC Group: Ohmeda (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.
Innovation driven organization
– Ohmeda's Boc is one of the most innovative firm in sector. Manager in BOC Group: Ohmeda (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Ohmeda's Boc is present in almost all the verticals within the industry. This has provided firm in BOC Group: Ohmeda (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.
Operational resilience
– The operational resilience strategy in the BOC Group: Ohmeda (A) 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.
Cross disciplinary teams
– Horizontal connected teams at the Ohmeda's Boc are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Ohmeda's Boc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ohmeda's Boc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Ohmeda's Boc 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 BOC Group: Ohmeda (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses BOC Group: Ohmeda (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BOC Group: Ohmeda (A) are -
Skills based hiring
– The stress on hiring functional specialists at Ohmeda's Boc 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.
Need for greater diversity
– Ohmeda's Boc 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BOC Group: Ohmeda (A), is just above the industry average. Ohmeda's Boc 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ohmeda's Boc is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BOC Group: Ohmeda (A) 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 Ohmeda's Boc 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 - BOC Group: Ohmeda (A) should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the BOC Group: Ohmeda (A) 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 Ohmeda's Boc has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study BOC Group: Ohmeda (A), 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 BOC Group: Ohmeda (A) 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 Ohmeda's Boc 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Ohmeda's Boc 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. Ohmeda's Boc 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.
Slow to strategic competitive environment developments
– As BOC Group: Ohmeda (A) HBR case study mentions - Ohmeda's Boc 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.
High cash cycle compare to competitors
Ohmeda's Boc 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 BOC Group: Ohmeda (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 BOC Group: Ohmeda (A) are -
Learning at scale
– Online learning technologies has now opened space for Ohmeda's Boc 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ohmeda's Boc can use these opportunities to build new business models that can help the communities that Ohmeda's Boc 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, Ohmeda's Boc is facing challenges because of the dominance of functional experts in the organization. BOC Group: Ohmeda (A) 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.
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. Ohmeda's Boc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ohmeda's Boc 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 Ohmeda's Boc to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ohmeda's Boc 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.
Manufacturing automation
– Ohmeda's Boc 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.
Using analytics as competitive advantage
– Ohmeda's Boc 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 BOC Group: Ohmeda (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ohmeda's Boc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Ohmeda's Boc 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ohmeda's Boc 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, BOC Group: Ohmeda (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.
Developing new processes and practices
– Ohmeda's Boc can develop new processes and procedures in Sales & Marketing 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.
Creating value in data economy
– The success of analytics program of Ohmeda's Boc has opened avenues for new revenue streams for the organization in the industry. This can help Ohmeda's Boc to build a more holistic ecosystem as suggested in the BOC Group: Ohmeda (A) case study. Ohmeda's Boc can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Ohmeda's Boc 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.
Threats BOC Group: Ohmeda (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BOC Group: Ohmeda (A) are -
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. Ohmeda's Boc 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 Ohmeda's Boc in the Sales & Marketing sector and impact the bottomline of the organization.
Consumer confidence and its impact on Ohmeda's Boc 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.
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 Ohmeda's Boc business can come under increasing regulations regarding data privacy, data security, etc.
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. Ohmeda's Boc needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ohmeda's Boc 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.
Increasing wage structure of Ohmeda's Boc
– 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 Ohmeda's Boc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ohmeda's Boc 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 BOC Group: Ohmeda (A) .
Shortening product life cycle
– it is one of the major threat that Ohmeda's Boc is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Ohmeda's Boc 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 Ohmeda's Boc 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.
Weighted SWOT Analysis of BOC Group: Ohmeda (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 BOC Group: Ohmeda (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 BOC Group: Ohmeda (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 BOC Group: Ohmeda (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 BOC Group: Ohmeda (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 Ohmeda's Boc needs to make to build a sustainable competitive advantage.