Finning International Inc. in the United Kingdom SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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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 - – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, there is backlash against globalization, increasing energy prices, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
Highly skilled collaborators
– Finning U.k 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 Finning International Inc. in the United Kingdom HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Finning U.k 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 Finning U.k is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Finning International Inc. in the United Kingdom Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Finning U.k has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Finning U.k 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.
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 -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Finning International Inc. in the United Kingdom, is just above the industry average. Finning U.k 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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Finning U.k 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. Finning U.k 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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Finning U.k supply chain. Even after few cautionary changes mentioned in the HBR case study - Finning International Inc. in the United Kingdom, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Finning U.k vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Finning U.k 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.
No frontier risks strategy
– After analyzing the HBR case study Finning International Inc. in the United Kingdom, 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.
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.
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.
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.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, Finning U.k 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.
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.
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.
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.
Building a culture of innovation
– managers at Finning U.k 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.
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.
Using analytics as competitive advantage
– Finning U.k has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Finning International Inc. in the United Kingdom - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Finning U.k to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Finning U.k can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Finning International Inc. in the United Kingdom 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. 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.
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 Finning U.k in the consumer business. Now Finning U.k can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Manufacturing automation
– Finning U.k 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.
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.
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 -
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.
Stagnating economy with rate increase
– Finning U.k 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.
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.
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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 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.
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. Finning U.k can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 .
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.
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.
Regulatory challenges
– Finning U.k 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.
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. Finning U.k 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.
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.