Converting the North American Decking Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Converting the North American Decking Market
Problem: Hilti had targeted its "direct fastening" technology - using propellants to drive nails into concrete or steel - at the large and attractive North American decking market where decking involved attaching profiled metal sheets for floors or roofs to a building's frame, mostly by welding. However, after several years, Hilti had still not succeeded in converting deck installers to its technology, and market share was in single digits. Solution: Decrease conversion barriers for all players in the value chain through a multi-dimensional approach consisting of offering product and service innovation, engineering support and new marketing tools that demonstrated the increased productivity, quality and worker safety compared to welding. Key steps: 1. Develop a customized product offering addressing country- and segment-specific requirements; 2. Launch a new service and transaction model to decrease upfront investment and switching costs; 3. Develop targeted sales and marketing initiatives to gain support from the complex network of stakeholders in the value chain. Learning objective: Understand what successful strategies can be employed to capture value from innovation in a B2B environment that represents many barriers to adoption for new technology; illustrate key steps taken by the company showcased to re-launch an innovative product in the B2B construction market that initially failed to capture market share.
Authors :: Wolfgang Ulaga, Katrin Siebenburger, Victoria Kemanian
Swot Analysis of "Converting the North American Decking Market" written by Wolfgang Ulaga, Katrin Siebenburger, Victoria Kemanian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Decking Hilti facing as an external strategic factors. Some of the topics covered in Converting the North American Decking Market case study are - Strategic Management Strategies, Innovation, Marketing, Organizational culture, Sales, Social platforms and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Converting the North American Decking Market casestudy better are - – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, technology disruption, increasing government debt because of Covid-19 spendings, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, etc
Introduction to SWOT Analysis of Converting the North American Decking Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Converting the North American Decking Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Decking Hilti, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Decking Hilti 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 Converting the North American Decking Market can be done for the following purposes –
1. Strategic planning using facts provided in Converting the North American Decking Market case study
2. Improving business portfolio management of Decking Hilti
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 Decking Hilti
Strengths Converting the North American Decking Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Decking Hilti in Converting the North American Decking Market Harvard Business Review case study are -
Analytics focus
– Decking Hilti is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Wolfgang Ulaga, Katrin Siebenburger, Victoria Kemanian can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Sales & Marketing industry
– Converting the North American Decking Market firm has clearly differentiated products in the market place. This has enabled Decking Hilti to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Decking Hilti to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Decking Hilti is one of the leading recruiters in the industry. Managers in the Converting the North American Decking Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Decking Hilti is one of the most innovative firm in sector. Manager in Converting the North American Decking Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Decking Hilti 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 Converting the North American Decking Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Decking Hilti 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 Converting the North American Decking Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Decking Hilti 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 Decking Hilti is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Converting the North American Decking Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Decking Hilti digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Decking Hilti 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.
Training and development
– Decking Hilti has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Converting the North American Decking Market 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.
Cross disciplinary teams
– Horizontal connected teams at the Decking Hilti 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.
Successful track record of launching new products
– Decking Hilti has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Decking Hilti 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 Converting the North American Decking Market 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.
Weaknesses Converting the North American Decking Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Converting the North American Decking Market are -
High cash cycle compare to competitors
Decking Hilti 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Converting the North American Decking Market 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 Decking Hilti has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Converting the North American Decking Market, 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.
Slow to strategic competitive environment developments
– As Converting the North American Decking Market HBR case study mentions - Decking Hilti 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 Decking Hilti 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Converting the North American Decking Market 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 Decking Hilti 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Converting the North American Decking Market, is just above the industry average. Decking Hilti 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.
Low market penetration in new markets
– Outside its home market of Decking Hilti, firm in the HBR case study Converting the North American Decking Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Decking Hilti products
– To increase the profitability and margins on the products, Decking Hilti needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Decking Hilti 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Converting the North American Decking Market, in the dynamic environment Decking Hilti has struggled to respond to the nimble upstart competition. Decking Hilti has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Converting the North American Decking Market | 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 Converting the North American Decking Market are -
Creating value in data economy
– The success of analytics program of Decking Hilti has opened avenues for new revenue streams for the organization in the industry. This can help Decking Hilti to build a more holistic ecosystem as suggested in the Converting the North American Decking Market case study. Decking Hilti can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Decking Hilti 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.
Buying journey improvements
– Decking Hilti can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Converting the North American Decking Market 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.
Leveraging digital technologies
– Decking Hilti 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Decking Hilti in the consumer business. Now Decking Hilti can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Decking Hilti can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Decking Hilti 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.
Developing new processes and practices
– Decking Hilti 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.
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. Decking Hilti 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. Decking Hilti 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.
Better consumer reach
– The expansion of the 5G network will help Decking Hilti to increase its market reach. Decking Hilti 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Decking Hilti 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 Decking Hilti to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Decking Hilti 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, Converting the North American Decking Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Decking Hilti can use these opportunities to build new business models that can help the communities that Decking Hilti operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats Converting the North American Decking Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Converting the North American Decking Market are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Decking Hilti 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 Converting the North American Decking Market .
Shortening product life cycle
– it is one of the major threat that Decking Hilti is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Decking Hilti
– 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 Decking Hilti.
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 Decking Hilti in the Sales & Marketing sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Converting the North American Decking Market, Decking Hilti 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 .
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.
Stagnating economy with rate increase
– Decking Hilti 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.
Consumer confidence and its impact on Decking Hilti 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.
Environmental challenges
– Decking Hilti 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. Decking Hilti can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
High dependence on third party suppliers
– Decking Hilti 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.
Regulatory challenges
– Decking Hilti 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.
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. Decking Hilti needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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. Decking Hilti 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.
Weighted SWOT Analysis of Converting the North American Decking Market 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 Converting the North American Decking Market 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 Converting the North American Decking Market 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 Converting the North American Decking Market 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 Converting the North American Decking Market 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 Decking Hilti needs to make to build a sustainable competitive advantage.
