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 - – increasing government debt because of Covid-19 spendings, geopolitical disruptions, wage bills are increasing, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
Highly skilled collaborators
– Riverside Dec 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 DEC V. RIVERSIDE - Confidential Instructions for DEC HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Organizational Resilience of Riverside Dec
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Riverside Dec does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Riverside Dec in the sector have low bargaining power. DEC V. RIVERSIDE - Confidential Instructions for DEC has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Riverside Dec to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
Ability to recruit top talent
– Riverside Dec is one of the leading recruiters in the industry. Managers in the DEC V. RIVERSIDE - Confidential Instructions for DEC are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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 -
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.
Products dominated business model
– Even though Riverside Dec 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 - DEC V. RIVERSIDE - Confidential Instructions for DEC should strive to include more intangible value offerings along with its core products and services.
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.
Slow decision making process
– As mentioned earlier in the report, Riverside Dec 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. Riverside Dec 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.
Aligning sales with marketing
– It come across in the case study DEC V. RIVERSIDE - Confidential Instructions for DEC 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 DEC V. RIVERSIDE - Confidential Instructions for DEC can leverage the sales team experience to cultivate customer relationships as Riverside Dec is planning to shift buying processes online.
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.
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.
Slow to strategic competitive environment developments
– As DEC V. RIVERSIDE - Confidential Instructions for DEC HBR case study mentions - Riverside Dec takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study DEC V. RIVERSIDE - Confidential Instructions for DEC, in the dynamic environment Riverside Dec has struggled to respond to the nimble upstart competition. Riverside Dec has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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 -
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. Riverside Dec can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Riverside Dec 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 Riverside Dec to hire the very best people irrespective of their geographical location.
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 Riverside Dec in the consumer business. Now Riverside Dec can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Riverside Dec 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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Riverside Dec is facing challenges because of the dominance of functional experts in the organization. DEC V. RIVERSIDE - Confidential Instructions for DEC 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.
Better consumer reach
– The expansion of the 5G network will help Riverside Dec to increase its market reach. Riverside Dec will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– 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.
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.
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.
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.
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.
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 -
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.
Increasing wage structure of Riverside Dec
– 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 Riverside Dec.
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.
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 Riverside Dec in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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 .
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.
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.
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.
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.
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 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.