Case Study Description of Amanco: Developing the Sustainability Scorecard
Describes the challenges of using the Balanced Scorecard to implement a triple-bottom-line strategy for delivering excellent economic, environmental, and social performance. The owners and senior executive team of Amanco, a producer of plastic pipe and complete water treatment systems, want strong financial returns but are also deeply committed to improving the environment and making a difference in people's lives. Robert Salas, CEO, wants a management system that communicates and motivates Amanco's three high-level goals. Initially, he creates a simple scorecard of measures, but he soon migrates to developing a strategy map and Balanced Scorecard that places economic, environmental, and social objectives as the highest-level objectives. He faces the challenges of cascading the corporate Balanced Scorecard to operating units throughout Latin America and how to develop better measures of social and environmental impact. Salas must also address whether he can sustain Amanco's balanced strategy while entering the Brazilian market, where he faces an entrenched and much larger competitor.
Authors :: Robert S. Kaplan, Ricardo Reisen de Pinho
Topics :: Strategy & Execution
Tags :: International business, Social enterprise, Social responsibility, Strategy, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Amanco: Developing the Sustainability Scorecard" written by Robert S. Kaplan, Ricardo Reisen de Pinho includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Scorecard Balanced facing as an external strategic factors. Some of the topics covered in Amanco: Developing the Sustainability Scorecard case study are - Strategic Management Strategies, International business, Social enterprise, Social responsibility, Strategy, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Amanco: Developing the Sustainability Scorecard casestudy better are - – talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Amanco: Developing the Sustainability Scorecard
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Amanco: Developing the Sustainability Scorecard case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Scorecard Balanced, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Scorecard Balanced 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 Amanco: Developing the Sustainability Scorecard can be done for the following purposes –
1. Strategic planning using facts provided in Amanco: Developing the Sustainability Scorecard case study
2. Improving business portfolio management of Scorecard Balanced
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Scorecard Balanced
Strengths Amanco: Developing the Sustainability Scorecard | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Scorecard Balanced in Amanco: Developing the Sustainability Scorecard Harvard Business Review case study are -
Learning organization
- Scorecard Balanced 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 Scorecard Balanced is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Amanco: Developing the Sustainability Scorecard Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Scorecard Balanced in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Scorecard Balanced 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 Amanco: Developing the Sustainability Scorecard HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Scorecard Balanced 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 Amanco: Developing the Sustainability Scorecard - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Scorecard Balanced is present in almost all the verticals within the industry. This has provided firm in Amanco: Developing the Sustainability Scorecard 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
– Scorecard Balanced is one of the leading recruiters in the industry. Managers in the Amanco: Developing the Sustainability Scorecard are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Scorecard Balanced
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Scorecard Balanced does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Scorecard Balanced has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Scorecard Balanced 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 Strategy & Execution segment
- digital transformation varies from industry to industry. For Scorecard Balanced digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Scorecard Balanced 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Amanco: Developing the Sustainability Scorecard firm has clearly differentiated products in the market place. This has enabled Scorecard Balanced to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Scorecard Balanced to invest into research and development (R&D) and innovation.
Analytics focus
– Scorecard Balanced 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 Robert S. Kaplan, Ricardo Reisen de Pinho 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.
Strong track record of project management
– Scorecard Balanced is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Amanco: Developing the Sustainability Scorecard | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Amanco: Developing the Sustainability Scorecard are -
Lack of clear differentiation of Scorecard Balanced products
– To increase the profitability and margins on the products, Scorecard Balanced needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Scorecard Balanced has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Scorecard Balanced 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 - Amanco: Developing the Sustainability Scorecard should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Amanco: Developing the Sustainability Scorecard, is just above the industry average. Scorecard Balanced 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Amanco: Developing the Sustainability Scorecard 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 Scorecard Balanced 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Scorecard Balanced 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.
Aligning sales with marketing
– It come across in the case study Amanco: Developing the Sustainability Scorecard 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 Amanco: Developing the Sustainability Scorecard can leverage the sales team experience to cultivate customer relationships as Scorecard Balanced is planning to shift buying processes online.
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 Scorecard Balanced supply chain. Even after few cautionary changes mentioned in the HBR case study - Amanco: Developing the Sustainability Scorecard, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Scorecard Balanced vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Amanco: Developing the Sustainability Scorecard, it seems that the employees of Scorecard Balanced 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 Amanco: Developing the Sustainability Scorecard, in the dynamic environment Scorecard Balanced has struggled to respond to the nimble upstart competition. Scorecard Balanced has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Scorecard Balanced is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Scorecard Balanced needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Scorecard Balanced to focus more on services rather than just following the product oriented approach.
Opportunities Amanco: Developing the Sustainability Scorecard | 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 Amanco: Developing the Sustainability Scorecard are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Scorecard Balanced can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Scorecard Balanced 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 Scorecard Balanced in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Scorecard Balanced 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 Amanco: Developing the Sustainability Scorecard - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Scorecard Balanced to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Scorecard Balanced has opened avenues for new revenue streams for the organization in the industry. This can help Scorecard Balanced to build a more holistic ecosystem as suggested in the Amanco: Developing the Sustainability Scorecard case study. Scorecard Balanced can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Scorecard Balanced in the consumer business. Now Scorecard Balanced can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Scorecard Balanced can use these opportunities to build new business models that can help the communities that Scorecard Balanced operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Scorecard Balanced 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, Amanco: Developing the Sustainability Scorecard, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Scorecard Balanced 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. Scorecard Balanced 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.
Learning at scale
– Online learning technologies has now opened space for Scorecard Balanced 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.
Better consumer reach
– The expansion of the 5G network will help Scorecard Balanced to increase its market reach. Scorecard Balanced 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.
Leveraging digital technologies
– Scorecard Balanced 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.
Buying journey improvements
– Scorecard Balanced can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Amanco: Developing the Sustainability Scorecard 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.
Threats Amanco: Developing the Sustainability Scorecard External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Amanco: Developing the Sustainability Scorecard are -
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 Scorecard Balanced.
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 Scorecard Balanced business can come under increasing regulations regarding data privacy, data security, etc.
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 Scorecard Balanced in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Scorecard Balanced 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 Strategy & Execution industry regulations.
Consumer confidence and its impact on Scorecard Balanced 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Scorecard Balanced can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Scorecard Balanced 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Scorecard Balanced in the Strategy & Execution industry. The Strategy & Execution 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Amanco: Developing the Sustainability Scorecard, Scorecard Balanced may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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. Scorecard Balanced needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Scorecard Balanced is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 dependence on third party suppliers
– Scorecard Balanced 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 Amanco: Developing the Sustainability Scorecard 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 Amanco: Developing the Sustainability Scorecard 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 Amanco: Developing the Sustainability Scorecard 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 Amanco: Developing the Sustainability Scorecard 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 Amanco: Developing the Sustainability Scorecard 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 Scorecard Balanced needs to make to build a sustainable competitive advantage.
