Case Study Description of Stryker Corp.: In-sourcing PCBs
Examines a proposed investment in the capability to manufacture printed circuit boards (PCBs) in-house rather than buying them from third-party contract manufacturers. Stryker Corporation's Instruments business is considering the proposal in response to difficulties with existing suppliers. Requires students to formulate and execute basic quantitative capital budgeting analyses, specifically, to compute net present value (NPV) internal rate of return (IRR) and payback period.
Swot Analysis of "Stryker Corp.: In-sourcing PCBs" written by Timothy A. Luehrman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pcbs Stryker facing as an external strategic factors. Some of the topics covered in Stryker Corp.: In-sourcing PCBs case study are - Strategic Management Strategies, Costs, Financial analysis and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Stryker Corp.: In-sourcing PCBs casestudy better are - – technology disruption, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, geopolitical disruptions, increasing energy prices,
increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Stryker Corp.: In-sourcing PCBs
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Stryker Corp.: In-sourcing PCBs case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pcbs Stryker, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pcbs Stryker 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 Stryker Corp.: In-sourcing PCBs can be done for the following purposes –
1. Strategic planning using facts provided in Stryker Corp.: In-sourcing PCBs case study
2. Improving business portfolio management of Pcbs Stryker
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 Pcbs Stryker
Strengths Stryker Corp.: In-sourcing PCBs | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pcbs Stryker in Stryker Corp.: In-sourcing PCBs Harvard Business Review case study are -
Learning organization
- Pcbs Stryker 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 Pcbs Stryker is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Stryker Corp.: In-sourcing PCBs Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Pcbs Stryker is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Pcbs Stryker in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Pcbs Stryker 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 Timothy A. Luehrman 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.
Successful track record of launching new products
– Pcbs Stryker has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pcbs Stryker 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Pcbs Stryker digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pcbs Stryker 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.
High switching costs
– The high switching costs that Pcbs Stryker 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.
Low bargaining power of suppliers
– Suppliers of Pcbs Stryker in the sector have low bargaining power. Stryker Corp.: In-sourcing PCBs has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pcbs Stryker to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Pcbs Stryker has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Stryker Corp.: In-sourcing PCBs 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.
Innovation driven organization
– Pcbs Stryker is one of the most innovative firm in sector. Manager in Stryker Corp.: In-sourcing PCBs 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
– Pcbs Stryker has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pcbs Stryker to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Stryker Corp.: In-sourcing PCBs 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 Stryker Corp.: In-sourcing PCBs | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Stryker Corp.: In-sourcing PCBs are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Stryker Corp.: In-sourcing PCBs, it seems that the employees of Pcbs Stryker 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Stryker Corp.: In-sourcing PCBs, in the dynamic environment Pcbs Stryker has struggled to respond to the nimble upstart competition. Pcbs Stryker has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Stryker Corp.: In-sourcing PCBs 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 Stryker Corp.: In-sourcing PCBs can leverage the sales team experience to cultivate customer relationships as Pcbs Stryker is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Stryker Corp.: In-sourcing PCBs, 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.
Increasing silos among functional specialists
– The organizational structure of Pcbs Stryker is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Pcbs Stryker needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pcbs Stryker to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Stryker Corp.: In-sourcing PCBs 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 Pcbs Stryker 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Pcbs Stryker, firm in the HBR case study Stryker Corp.: In-sourcing PCBs needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Pcbs Stryker has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Skills based hiring
– The stress on hiring functional specialists at Pcbs Stryker 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
– Pcbs Stryker 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.
Lack of clear differentiation of Pcbs Stryker products
– To increase the profitability and margins on the products, Pcbs Stryker needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Stryker Corp.: In-sourcing PCBs | 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 Stryker Corp.: In-sourcing PCBs are -
Leveraging digital technologies
– Pcbs Stryker 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.
Creating value in data economy
– The success of analytics program of Pcbs Stryker has opened avenues for new revenue streams for the organization in the industry. This can help Pcbs Stryker to build a more holistic ecosystem as suggested in the Stryker Corp.: In-sourcing PCBs case study. Pcbs Stryker can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Pcbs Stryker 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pcbs Stryker can use these opportunities to build new business models that can help the communities that Pcbs Stryker operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pcbs Stryker 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. Pcbs Stryker 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.
Loyalty marketing
– Pcbs Stryker 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 Pcbs Stryker can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Pcbs Stryker 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.
Buying journey improvements
– Pcbs Stryker can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Stryker Corp.: In-sourcing PCBs 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pcbs Stryker is facing challenges because of the dominance of functional experts in the organization. Stryker Corp.: In-sourcing PCBs 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.
Using analytics as competitive advantage
– Pcbs Stryker 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 Stryker Corp.: In-sourcing PCBs - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pcbs Stryker to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Pcbs Stryker 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.
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 Pcbs Stryker 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.
Threats Stryker Corp.: In-sourcing PCBs External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Stryker Corp.: In-sourcing PCBs are -
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. Pcbs Stryker needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Pcbs Stryker in the Finance & Accounting sector and impact the bottomline of the organization.
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 Pcbs Stryker.
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 Pcbs Stryker business can come under increasing regulations regarding data privacy, data security, etc.
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. Pcbs Stryker will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pcbs Stryker 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Stryker Corp.: In-sourcing PCBs, Pcbs Stryker 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 .
Environmental challenges
– Pcbs Stryker 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. Pcbs Stryker can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Pcbs Stryker
– 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 Pcbs Stryker.
Regulatory challenges
– Pcbs Stryker 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.
High dependence on third party suppliers
– Pcbs Stryker 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.
Weighted SWOT Analysis of Stryker Corp.: In-sourcing PCBs 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 Stryker Corp.: In-sourcing PCBs 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 Stryker Corp.: In-sourcing PCBs 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 Stryker Corp.: In-sourcing PCBs 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 Stryker Corp.: In-sourcing PCBs 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 Pcbs Stryker needs to make to build a sustainable competitive advantage.
