DEC V. RIVERSIDE - Confidential Instructions for DEC SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of DEC V. RIVERSIDE - Confidential Instructions for DEC
Confidential Instructions for DEC for product #PON183.Two-party, multi-issue, scoreable negotiation between a manufacturer and a state environmental agency to reach a settlement over the manufacturer's pollution of a local river. Riverside Lumber is a pulp manufacturer in a small town in the Pacific Northwest. Riverside regularly dumps effluent into a nearby river. The Division of Environmental Conservation (DEC) claims that the effluent is toxic and jeopardizes the local salmon catch. Relations between the two parties have deteriorated. DEC has filed suit against Riverside in an attempt to close the plant. The trial date is three days away, and the parties are meeting to see if a last minute settlement is possible. Several issues will surface in the negotiation: Should Riverside be forced to purchase a special scrubber to neutralize the toxic effects of its effluent? Should Riverside be forced to close temporarily or permanently? Can DEC provide Riverside financial incentives to encourage cooperation? This is a role play case.
Authors :: David A. Lax, James K. Sebenius, Lawrence Susskind
Swot Analysis of "DEC V. RIVERSIDE - Confidential Instructions for DEC" written by David A. Lax, James K. Sebenius, Lawrence Susskind includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Riverside Dec facing as an external strategic factors. Some of the topics covered in DEC V. RIVERSIDE - Confidential Instructions for DEC case study are - Strategic Management Strategies, Negotiations, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the DEC V. RIVERSIDE - Confidential Instructions for DEC casestudy better are - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, there is backlash against globalization, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of DEC V. RIVERSIDE - Confidential Instructions for DEC
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DEC V. RIVERSIDE - Confidential Instructions for DEC case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Riverside Dec, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Riverside Dec 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 DEC V. RIVERSIDE - Confidential Instructions for DEC can be done for the following purposes –
1. Strategic planning using facts provided in DEC V. RIVERSIDE - Confidential Instructions for DEC case study
2. Improving business portfolio management of Riverside Dec
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 Riverside Dec
Strengths DEC V. RIVERSIDE - Confidential Instructions for DEC | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Riverside Dec in DEC V. RIVERSIDE - Confidential Instructions for DEC Harvard Business Review case study are -
Strong track record of project management
– Riverside Dec is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Riverside Dec 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 David A. Lax, James K. Sebenius, 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.
Effective Research and Development (R&D)
– Riverside Dec 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 DEC V. RIVERSIDE - Confidential Instructions for DEC - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Riverside Dec is present in almost all the verticals within the industry. This has provided firm in DEC V. RIVERSIDE - Confidential Instructions for DEC 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.
Ability to lead change in Strategy & Execution field
– Riverside Dec 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 Riverside Dec in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Riverside Dec has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Riverside Dec 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.
Sustainable margins compare to other players in Strategy & Execution industry
– DEC V. RIVERSIDE - Confidential Instructions for DEC firm has clearly differentiated products in the market place. This has enabled Riverside Dec to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Riverside Dec to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Riverside Dec 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Riverside Dec digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Riverside Dec 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.
High brand equity
– Riverside Dec has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Riverside Dec to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Riverside Dec has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in DEC V. RIVERSIDE - Confidential Instructions for DEC 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.
Learning organization
- Riverside Dec 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 Riverside Dec is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in DEC V. RIVERSIDE - Confidential Instructions for DEC Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses DEC V. RIVERSIDE - Confidential Instructions for DEC | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DEC V. RIVERSIDE - Confidential Instructions for DEC are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the DEC V. RIVERSIDE - Confidential Instructions for DEC HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Riverside Dec has relatively successful track record of launching new products.
Lack of clear differentiation of Riverside Dec products
– To increase the profitability and margins on the products, Riverside Dec needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Riverside Dec 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study DEC V. RIVERSIDE - Confidential Instructions for DEC, is just above the industry average. Riverside Dec 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.
No frontier risks strategy
– After analyzing the HBR case study DEC V. RIVERSIDE - Confidential Instructions for DEC, 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.
Increasing silos among functional specialists
– The organizational structure of Riverside Dec is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Riverside Dec needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Riverside Dec to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, David A. Lax, James K. Sebenius, Lawrence Susskind suggests that, Riverside Dec 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 DEC V. RIVERSIDE - Confidential Instructions for DEC 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 Riverside Dec 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Riverside Dec, firm in the HBR case study DEC V. RIVERSIDE - Confidential Instructions for DEC needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Riverside Dec supply chain. Even after few cautionary changes mentioned in the HBR case study - DEC V. RIVERSIDE - Confidential Instructions for DEC, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Riverside Dec vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Riverside Dec 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.
Opportunities DEC V. RIVERSIDE - Confidential Instructions for DEC | 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 DEC V. RIVERSIDE - Confidential Instructions for DEC are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Riverside Dec can use these opportunities to build new business models that can help the communities that Riverside Dec operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Riverside Dec can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Riverside Dec 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.
Manufacturing automation
– Riverside Dec 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.
Building a culture of innovation
– managers at Riverside Dec 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Riverside Dec 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.
Creating value in data economy
– The success of analytics program of Riverside Dec has opened avenues for new revenue streams for the organization in the industry. This can help Riverside Dec to build a more holistic ecosystem as suggested in the DEC V. RIVERSIDE - Confidential Instructions for DEC case study. Riverside Dec can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Riverside Dec 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Riverside Dec can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Riverside Dec 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.
Using analytics as competitive advantage
– Riverside Dec 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 DEC V. RIVERSIDE - Confidential Instructions for DEC - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Riverside Dec to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Riverside Dec 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.
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. Riverside Dec 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. Riverside Dec 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.
Threats DEC V. RIVERSIDE - Confidential Instructions for DEC External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DEC V. RIVERSIDE - Confidential Instructions for DEC are -
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 Riverside Dec business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Riverside Dec 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Riverside Dec 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 DEC V. RIVERSIDE - Confidential Instructions for DEC .
Regulatory challenges
– Riverside Dec 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.
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. Riverside Dec needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Riverside Dec 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. Riverside Dec can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study DEC V. RIVERSIDE - Confidential Instructions for DEC, Riverside Dec 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 .
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. Riverside Dec 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.
Stagnating economy with rate increase
– Riverside Dec 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Riverside Dec 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. Riverside Dec can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Riverside Dec 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.
Weighted SWOT Analysis of DEC V. RIVERSIDE - Confidential Instructions for DEC 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 DEC V. RIVERSIDE - Confidential Instructions for DEC 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 DEC V. RIVERSIDE - Confidential Instructions for DEC 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 DEC V. RIVERSIDE - Confidential Instructions for DEC 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 DEC V. RIVERSIDE - Confidential Instructions for DEC 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 Riverside Dec needs to make to build a sustainable competitive advantage.