TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

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.

Authors :: Tracey Brenner, Lawrence Susskind

Topics :: Strategy & Execution

Tags :: Negotiations, Pricing, Technology, Time management, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

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 - – cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc

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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.

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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

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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 -

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.

Organizational Resilience of Ast Tep

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ast Tep does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

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.

Highly skilled collaborators

– Ast Tep 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

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.

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.

High brand equity

– Ast Tep has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ast Tep to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Successful track record of launching new products

– Ast Tep has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ast Tep 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.

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.

Learning organization

- Ast Tep 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 Ast Tep is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST Harvard Business Review case study emphasize – knowledge, initiative, 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.

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.

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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 -

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.

Workers concerns about automation

– As automation is fast increasing in the segment, Ast Tep 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.

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.

Skills based hiring

– The stress on hiring functional specialists at Ast Tep 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.

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.

Interest costs

– Compare to the competition, Ast Tep 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, Tracey Brenner, Lawrence Susskind suggests that, Ast Tep 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.

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.

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.

Slow to strategic competitive environment developments

– As TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST HBR case study mentions - Ast Tep takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

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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 -

Developing new processes and practices

– Ast Tep 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, 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Ast Tep can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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.

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.

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.

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.

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.

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.

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. Ast Tep can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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.

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.

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.

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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 -

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.

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.

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.

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.

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 .

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 Ast Tep business can come under increasing regulations regarding data privacy, data security, 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Operations at AST, Ast Tep 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.

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.

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.

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.

Stagnating economy with rate increase

– Ast Tep 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.

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.

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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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