Finning International Inc. in the United Kingdom SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Finning International Inc. in the United Kingdom
Finning International is a Canada-based international distributor of construction equipment with operations in the United Kingdom and Chile. The president of Finning International is facing a dilemma: Can Finning divest its U.K. operations without damaging its relationship with its only supplier? Or is entry into the U.K. plant hire (equipment rental) market the only feasible option? The plant hire segment of the construction equipment industry has been growing steadily in the United Kingdom. Meanwhile, Finning has been faring poorly in the U.K. construction equipment sales market. The president's options include divesting its U.K. subsidiary and focusing on another part of the world, working to improve operations in the United Kingdom, or betting heavily by entering into the plant hire market. Each alternative has implications for Finning's valuable supplier relationship.
Swot Analysis of "Finning International Inc. in the United Kingdom" written by Stewart Thornhill, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Finning U.k facing as an external strategic factors. Some of the topics covered in Finning International Inc. in the United Kingdom case study are - Strategic Management Strategies, Cross-cultural management, Decision making, Operations management, Risk management, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Finning International Inc. in the United Kingdom casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of Finning International Inc. in the United Kingdom
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Finning International Inc. in the United Kingdom case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Finning U.k, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Finning U.k 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 Finning International Inc. in the United Kingdom can be done for the following purposes –
1. Strategic planning using facts provided in Finning International Inc. in the United Kingdom case study
2. Improving business portfolio management of Finning U.k
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 Finning U.k
Strengths Finning International Inc. in the United Kingdom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Finning U.k in Finning International Inc. in the United Kingdom Harvard Business Review case study are -
Training and development
– Finning U.k has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Finning International Inc. in the United Kingdom 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.
Innovation driven organization
– Finning U.k is one of the most innovative firm in sector. Manager in Finning International Inc. in the United Kingdom Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Finning U.k is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– Finning U.k 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 Finning U.k in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Finning U.k 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 Stewart Thornhill, Ken Mark 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.
Operational resilience
– The operational resilience strategy in the Finning International Inc. in the United Kingdom 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Finning International Inc. in the United Kingdom firm has clearly differentiated products in the market place. This has enabled Finning U.k to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Finning U.k to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Finning U.k 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.
Effective Research and Development (R&D)
– Finning U.k 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 Finning International Inc. in the United Kingdom - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Finning U.k digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Finning U.k 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.
Low bargaining power of suppliers
– Suppliers of Finning U.k in the sector have low bargaining power. Finning International Inc. in the United Kingdom has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Finning U.k to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Finning U.k
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Finning U.k does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Finning International Inc. in the United Kingdom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Finning International Inc. in the United Kingdom are -
Increasing silos among functional specialists
– The organizational structure of Finning U.k is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Finning U.k needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Finning U.k to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Finning U.k 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 - Finning International Inc. in the United Kingdom should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Finning International Inc. in the United Kingdom 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 Finning International Inc. in the United Kingdom can leverage the sales team experience to cultivate customer relationships as Finning U.k is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Finning U.k 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Stewart Thornhill, Ken Mark suggests that, Finning U.k 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Finning International Inc. in the United Kingdom 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 Finning U.k 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Finning International Inc. in the United Kingdom, in the dynamic environment Finning U.k has struggled to respond to the nimble upstart competition. Finning U.k has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Finning U.k 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.
Low market penetration in new markets
– Outside its home market of Finning U.k, firm in the HBR case study Finning International Inc. in the United Kingdom needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Finning U.k 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.
Skills based hiring
– The stress on hiring functional specialists at Finning U.k 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.
Opportunities Finning International Inc. in the United Kingdom | 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 Finning International Inc. in the United Kingdom are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Finning U.k 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 Finning U.k to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Finning U.k can use these opportunities to build new business models that can help the communities that Finning U.k 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 Finning U.k in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Finning U.k 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.
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. Finning U.k can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Finning U.k can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Finning U.k can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Finning U.k to increase its market reach. Finning U.k 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Finning U.k is facing challenges because of the dominance of functional experts in the organization. Finning International Inc. in the United Kingdom 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.
Loyalty marketing
– Finning U.k 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.
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. Finning U.k can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Finning U.k 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, Finning International Inc. in the United Kingdom, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Finning U.k has opened avenues for new revenue streams for the organization in the industry. This can help Finning U.k to build a more holistic ecosystem as suggested in the Finning International Inc. in the United Kingdom case study. Finning U.k can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Finning U.k 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.
Threats Finning International Inc. in the United Kingdom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Finning International Inc. in the United Kingdom are -
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.
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 Finning U.k in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Finning U.k 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Finning U.k 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Finning U.k with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Finning U.k business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Finning U.k 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.
Technology acceleration in Forth Industrial Revolution
– Finning U.k has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Finning U.k 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 wage structure of Finning U.k
– 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 Finning U.k.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Finning U.k 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 Finning International Inc. in the United Kingdom .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Finning International Inc. in the United Kingdom, Finning U.k 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 .
Environmental challenges
– Finning U.k 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. Finning U.k can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Finning International Inc. in the United Kingdom 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 Finning International Inc. in the United Kingdom 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 Finning International Inc. in the United Kingdom 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 Finning International Inc. in the United Kingdom 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 Finning International Inc. in the United Kingdom 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 Finning U.k needs to make to build a sustainable competitive advantage.