TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement 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 Procurement at AST

Confidential Instructions for the V.P. of Procurement 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 Procurement 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 Procurement 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 Procurement at AST casestudy better are - – technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, wage bills are increasing, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, there is backlash against globalization, cloud computing is disrupting traditional business models, etc

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Introduction to SWOT Analysis of TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement 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 Procurement 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 Procurement 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 Procurement 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 Procurement 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 Procurement at AST Harvard Business Review case study are -

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 Procurement 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.

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 Procurement 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.

Operational resilience

– The operational resilience strategy in the TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement 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.

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.

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 Procurement at AST HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

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 Procurement at AST Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

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 Procurement 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.

Analytics focus

– Ast Tep 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 Tracey Brenner, Lawrence Susskind 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.

Cross disciplinary teams

– Horizontal connected teams at the Ast Tep 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.

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.

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Weaknesses TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement 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 Procurement at AST are -

High operating costs

– Compare to the competitors, firm in the HBR case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement 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 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement 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.

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.

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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement 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.

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.

No frontier risks strategy

– After analyzing the HBR case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement at AST, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

Aligning sales with marketing

– It come across in the case study TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement at AST 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 TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement at AST can leverage the sales team experience to cultivate customer relationships as Ast Tep is planning to shift buying processes online.

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.

Increasing silos among functional specialists

– The organizational structure of Ast Tep is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ast Tep needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ast Tep to focus more on services rather than just following the product oriented approach.

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Opportunities TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement 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 Procurement at AST are -

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.

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.

Loyalty marketing

– Ast Tep 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.

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.

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.

Manufacturing automation

– Ast Tep 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.

Creating value in data economy

– The success of analytics program of Ast Tep has opened avenues for new revenue streams for the organization in the industry. This can help Ast Tep to build a more holistic ecosystem as suggested in the TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement at AST case study. Ast Tep can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

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.

Better consumer reach

– The expansion of the 5G network will help Ast Tep to increase its market reach. Ast Tep 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

– 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.

Buying journey improvements

– Ast Tep can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement at AST 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.

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.

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.

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

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.

High dependence on third party suppliers

– Ast Tep 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 Ast Tep is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. 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.

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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ast Tep with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Increasing wage structure of Ast Tep

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Ast Tep.

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.

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 Procurement 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 .

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 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. Ast Tep needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.

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Weighted SWOT Analysis of TECHNOLOGY EQUIPMENT PARTNERS - Confidential Instructions for the V.P. of Procurement 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 Procurement 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 Procurement 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 Procurement 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 Procurement 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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