Vossloh: Restoring Trust after Two Consecutive Profit Warnings SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Vossloh: Restoring Trust after Two Consecutive Profit Warnings
Vossloh AG is preparing for its annual December conference with investors and analysts. The company, whose core business has always been the railway engineering sector, had to issue two consecutive profit warnings in 2011, which sent its stock back to levels last seen only in the aftermath of the economic crisis of 2009-10. The company's primary task is to find the right arguments to satisfy the conference participants and regain their trust. Vossloh's business units, relevant business environments, and problems such as stock developments and the threat of hostile takeover are discussed. One of the basic issues is whether Vossloh should focus on the still very important home countries in Europe and further strengthen its attempts to increase its share in niche markets or focus more on emerging markets in Asia, South America and eastern Europe.
Authors :: Jan Diebecker, Alexander Flugel, Thorsten Knauer, Tea Luhtanen
Swot Analysis of "Vossloh: Restoring Trust after Two Consecutive Profit Warnings" written by Jan Diebecker, Alexander Flugel, Thorsten Knauer, Tea Luhtanen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vossloh Warnings facing as an external strategic factors. Some of the topics covered in Vossloh: Restoring Trust after Two Consecutive Profit Warnings case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Vossloh: Restoring Trust after Two Consecutive Profit Warnings casestudy better are - – cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing household debt because of falling income levels,
increasing energy prices, technology disruption, etc
Introduction to SWOT Analysis of Vossloh: Restoring Trust after Two Consecutive Profit Warnings
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Vossloh: Restoring Trust after Two Consecutive Profit Warnings case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vossloh Warnings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vossloh Warnings 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings can be done for the following purposes –
1. Strategic planning using facts provided in Vossloh: Restoring Trust after Two Consecutive Profit Warnings case study
2. Improving business portfolio management of Vossloh Warnings
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 Vossloh Warnings
Strengths Vossloh: Restoring Trust after Two Consecutive Profit Warnings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vossloh Warnings in Vossloh: Restoring Trust after Two Consecutive Profit Warnings Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Vossloh Warnings 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 Vossloh Warnings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Vossloh Warnings in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Vossloh Warnings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vossloh Warnings 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.
Effective Research and Development (R&D)
– Vossloh Warnings 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Vossloh Warnings 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Vossloh Warnings in the sector have low bargaining power. Vossloh: Restoring Trust after Two Consecutive Profit Warnings has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vossloh Warnings to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Vossloh Warnings is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Vossloh Warnings digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vossloh Warnings 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.
Ability to recruit top talent
– Vossloh Warnings is one of the leading recruiters in the industry. Managers in the Vossloh: Restoring Trust after Two Consecutive Profit Warnings are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Vossloh Warnings has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vossloh Warnings to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Vossloh Warnings 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.
Diverse revenue streams
– Vossloh Warnings is present in almost all the verticals within the industry. This has provided firm in Vossloh: Restoring Trust after Two Consecutive Profit Warnings 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.
Weaknesses Vossloh: Restoring Trust after Two Consecutive Profit Warnings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vossloh: Restoring Trust after Two Consecutive Profit Warnings are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Vossloh: Restoring Trust after Two Consecutive Profit Warnings, is just above the industry average. Vossloh Warnings 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Vossloh: Restoring Trust after Two Consecutive Profit Warnings 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 Vossloh Warnings has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Vossloh Warnings 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Jan Diebecker, Alexander Flugel, Thorsten Knauer, Tea Luhtanen suggests that, Vossloh Warnings is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though Vossloh Warnings 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 - Vossloh: Restoring Trust after Two Consecutive Profit Warnings should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Vossloh: Restoring Trust after Two Consecutive Profit Warnings 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 Vossloh Warnings 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Vossloh Warnings 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. Vossloh Warnings 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Vossloh Warnings needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Vossloh: Restoring Trust after Two Consecutive Profit Warnings, in the dynamic environment Vossloh Warnings has struggled to respond to the nimble upstart competition. Vossloh Warnings has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Vossloh Warnings 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.
Increasing silos among functional specialists
– The organizational structure of Vossloh Warnings is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Vossloh Warnings needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vossloh Warnings to focus more on services rather than just following the product oriented approach.
Opportunities Vossloh: Restoring Trust after Two Consecutive Profit Warnings | 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings are -
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 Vossloh Warnings in the consumer business. Now Vossloh Warnings can target international markets with far fewer capital restrictions requirements than the existing system.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Vossloh Warnings can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Vossloh Warnings 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vossloh Warnings 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 Vossloh Warnings to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Vossloh Warnings can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vossloh Warnings 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.
Developing new processes and practices
– Vossloh Warnings can develop new processes and procedures in Strategy & Execution 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vossloh Warnings 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, Vossloh: Restoring Trust after Two Consecutive Profit Warnings, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Vossloh Warnings has opened avenues for new revenue streams for the organization in the industry. This can help Vossloh Warnings to build a more holistic ecosystem as suggested in the Vossloh: Restoring Trust after Two Consecutive Profit Warnings case study. Vossloh Warnings 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 Vossloh Warnings 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.
Using analytics as competitive advantage
– Vossloh Warnings 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vossloh Warnings to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Vossloh Warnings to increase its market reach. Vossloh Warnings 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.
Buying journey improvements
– Vossloh Warnings can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Vossloh: Restoring Trust after Two Consecutive Profit Warnings 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Vossloh: Restoring Trust after Two Consecutive Profit Warnings are -
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 Vossloh Warnings business can come under increasing regulations regarding data privacy, data security, etc.
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. Vossloh Warnings 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 Vossloh Warnings in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vossloh Warnings 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.
Stagnating economy with rate increase
– Vossloh Warnings 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.
High dependence on third party suppliers
– Vossloh Warnings 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.
Shortening product life cycle
– it is one of the major threat that Vossloh Warnings is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Vossloh: Restoring Trust after Two Consecutive Profit Warnings, Vossloh Warnings 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 .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High 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. Vossloh Warnings needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Vossloh Warnings has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Vossloh Warnings needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Vossloh Warnings 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. Vossloh Warnings can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Vossloh Warnings 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.
Weighted SWOT Analysis of Vossloh: Restoring Trust after Two Consecutive Profit Warnings 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings 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 Vossloh: Restoring Trust after Two Consecutive Profit Warnings 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 Vossloh Warnings needs to make to build a sustainable competitive advantage.
