Case Study Description of Allianz (D2): The Dresdner Transformation
This case is accompanied by a Video Short that can be shown in class or included in a digital coursepack. Instructors should consider the timing of making the video available to students, as it may reveal key case details.Supplements the (A) case.
Authors :: Joseph L. Bower, Marc L. Bertoneche, Anders Sjoman, Sonja Ellingson Hout
Swot Analysis of "Allianz (D2): The Dresdner Transformation" written by Joseph L. Bower, Marc L. Bertoneche, Anders Sjoman, Sonja Ellingson Hout includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that D2 Dresdner facing as an external strategic factors. Some of the topics covered in Allianz (D2): The Dresdner Transformation case study are - Strategic Management Strategies, Strategic planning, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Allianz (D2): The Dresdner Transformation casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, wage bills are increasing, increasing commodity prices, increasing household debt because of falling income levels,
increasing energy prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Allianz (D2): The Dresdner Transformation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Allianz (D2): The Dresdner Transformation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the D2 Dresdner, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which D2 Dresdner 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 Allianz (D2): The Dresdner Transformation can be done for the following purposes –
1. Strategic planning using facts provided in Allianz (D2): The Dresdner Transformation case study
2. Improving business portfolio management of D2 Dresdner
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 D2 Dresdner
Strengths Allianz (D2): The Dresdner Transformation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of D2 Dresdner in Allianz (D2): The Dresdner Transformation Harvard Business Review case study are -
Learning organization
- D2 Dresdner 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 D2 Dresdner is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Allianz (D2): The Dresdner Transformation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– D2 Dresdner has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. D2 Dresdner 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)
– D2 Dresdner 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 Allianz (D2): The Dresdner Transformation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– D2 Dresdner is one of the most innovative firm in sector. Manager in Allianz (D2): The Dresdner Transformation 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
– D2 Dresdner 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 Allianz (D2): The Dresdner Transformation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– D2 Dresdner is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– Allianz (D2): The Dresdner Transformation firm has clearly differentiated products in the market place. This has enabled D2 Dresdner to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped D2 Dresdner to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of D2 Dresdner in the sector have low bargaining power. Allianz (D2): The Dresdner Transformation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps D2 Dresdner to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– D2 Dresdner has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Allianz (D2): The Dresdner Transformation 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.
Superior customer experience
– The customer experience strategy of D2 Dresdner in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Strategy & Execution field
– D2 Dresdner 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 D2 Dresdner in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of D2 Dresdner
– The covid-19 pandemic has put organizational resilience at the centre of everthing that D2 Dresdner does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Allianz (D2): The Dresdner Transformation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Allianz (D2): The Dresdner Transformation are -
High cash cycle compare to competitors
D2 Dresdner 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.
Need for greater diversity
– D2 Dresdner 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, D2 Dresdner 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.
Products dominated business model
– Even though D2 Dresdner 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 - Allianz (D2): The Dresdner Transformation should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Allianz (D2): The Dresdner Transformation, in the dynamic environment D2 Dresdner has struggled to respond to the nimble upstart competition. D2 Dresdner has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Allianz (D2): The Dresdner Transformation, it seems that the employees of D2 Dresdner 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.
Aligning sales with marketing
– It come across in the case study Allianz (D2): The Dresdner Transformation 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 Allianz (D2): The Dresdner Transformation can leverage the sales team experience to cultivate customer relationships as D2 Dresdner is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of D2 Dresdner is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. D2 Dresdner needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help D2 Dresdner to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Joseph L. Bower, Marc L. Bertoneche, Anders Sjoman, Sonja Ellingson Hout suggests that, D2 Dresdner 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.
Low market penetration in new markets
– Outside its home market of D2 Dresdner, firm in the HBR case study Allianz (D2): The Dresdner Transformation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, D2 Dresdner 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. D2 Dresdner 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.
Opportunities Allianz (D2): The Dresdner Transformation | 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 Allianz (D2): The Dresdner Transformation are -
Leveraging digital technologies
– D2 Dresdner 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.
Developing new processes and practices
– D2 Dresdner 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.
Creating value in data economy
– The success of analytics program of D2 Dresdner has opened avenues for new revenue streams for the organization in the industry. This can help D2 Dresdner to build a more holistic ecosystem as suggested in the Allianz (D2): The Dresdner Transformation case study. D2 Dresdner can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help D2 Dresdner to increase its market reach. D2 Dresdner 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.
Learning at scale
– Online learning technologies has now opened space for D2 Dresdner 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.
Buying journey improvements
– D2 Dresdner can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Allianz (D2): The Dresdner Transformation 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. D2 Dresdner can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, D2 Dresdner 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.
Building a culture of innovation
– managers at D2 Dresdner 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for D2 Dresdner 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.
Manufacturing automation
– D2 Dresdner 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, D2 Dresdner 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, Allianz (D2): The Dresdner Transformation, 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 D2 Dresdner can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Allianz (D2): The Dresdner Transformation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Allianz (D2): The Dresdner Transformation are -
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. D2 Dresdner 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.
Regulatory challenges
– D2 Dresdner needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Consumer confidence and its impact on D2 Dresdner 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.
Increasing wage structure of D2 Dresdner
– 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 D2 Dresdner.
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 D2 Dresdner.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, D2 Dresdner 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 Allianz (D2): The Dresdner Transformation .
Environmental challenges
– D2 Dresdner 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. D2 Dresdner can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 D2 Dresdner business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– D2 Dresdner has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, D2 Dresdner 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.
High dependence on third party suppliers
– D2 Dresdner 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.
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. D2 Dresdner needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– D2 Dresdner 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 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.
Weighted SWOT Analysis of Allianz (D2): The Dresdner Transformation 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 Allianz (D2): The Dresdner Transformation 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 Allianz (D2): The Dresdner Transformation 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 Allianz (D2): The Dresdner Transformation 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 Allianz (D2): The Dresdner Transformation 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 D2 Dresdner needs to make to build a sustainable competitive advantage.
