TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST
Confidential Instructions for the V.P. of Operations at AST for product #PON453.Two-team, six-party, four-issue negotiation between representatives of two corporations setting up a simultaneous high-tech joint venture and purchasing agreement. Advanced Sensor Technologies (AST) is a leading manufacturer of chemical sensors. Technology Equipment Partners (TEP) manufactures the type of equipment AST uses to produce its sensors. AST and TEP are meeting to set the terms of a potential joint development and purchasing agreement. Three senior executives from each company will negotiate. They will try to reach agreement on four issues: tool price, order schedule, payment schedule, and intellectual property. This is a role play case.
Swot Analysis of "TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST" written by Tracey Brenner, Lawrence Susskind includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ast Tep facing as an external strategic factors. Some of the topics covered in TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST case study are - Strategic Management Strategies, Negotiations, Pricing, Technology, Time management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing commodity prices, wage bills are increasing, geopolitical disruptions, increasing household debt because of falling income levels, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, etc
Introduction to SWOT Analysis of TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ast Tep, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ast Tep 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST can be done for the following purposes –
1. Strategic planning using facts provided in TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST case study
2. Improving business portfolio management of Ast Tep
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 Ast Tep
Strengths TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ast Tep in TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Ast Tep in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Ast Tep in the sector have low bargaining power. TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ast Tep to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Ast Tep is present in almost all the verticals within the industry. This has provided firm in TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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.
Sustainable margins compare to other players in Strategy & Execution industry
– TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST firm has clearly differentiated products in the market place. This has enabled Ast Tep to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ast Tep to invest into research and development (R&D) and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ast Tep digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ast Tep 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.
Strong track record of project management
– Ast Tep is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Ast Tep has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Strategy & Execution field
– Ast Tep 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 Ast Tep in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Ast Tep has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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.
Ability to recruit top talent
– Ast Tep is one of the leading recruiters in the industry. Managers in the TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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
– Ast Tep is one of the most innovative firm in sector. Manager in TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST, in the dynamic environment Ast Tep has struggled to respond to the nimble upstart competition. Ast Tep has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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 Ast Tep 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ast Tep is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Ast Tep, firm in the HBR case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Ast Tep products
– To increase the profitability and margins on the products, Ast Tep needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Ast Tep 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.
Slow decision making process
– As mentioned earlier in the report, Ast Tep 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. Ast Tep 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.
High cash cycle compare to competitors
Ast Tep 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.
Capital Spending Reduction
– Even during the low interest decade, Ast Tep 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST, is just above the industry average. Ast Tep 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST, it seems that the employees of Ast Tep 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.
Opportunities TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST | 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST are -
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 Ast Tep 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.
Building a culture of innovation
– managers at Ast Tep 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 Strategy & Execution segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ast Tep can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ast Tep 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 Ast Tep to hire the very best people irrespective of their geographical location.
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. Ast Tep can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Ast Tep 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ast Tep to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ast Tep can use these opportunities to build new business models that can help the communities that Ast Tep operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ast Tep 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.
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 Ast Tep in the consumer business. Now Ast Tep can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ast Tep is facing challenges because of the dominance of functional experts in the organization. TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ast Tep 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, TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Ast Tep 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.
Learning at scale
– Online learning technologies has now opened space for Ast Tep 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.
Threats TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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 Ast Tep.
Environmental challenges
– Ast Tep 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. Ast Tep can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Ast Tep has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ast Tep 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ast Tep 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST .
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.
Consumer confidence and its impact on Ast Tep 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.
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. Ast Tep 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.
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 Ast Tep in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Ast Tep is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ast Tep 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.
Regulatory challenges
– Ast Tep 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.
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. Ast Tep can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST 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 Ast Tep needs to make to build a sustainable competitive advantage.
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