CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations
The chairman of the second-largest Swiss multinational company is preparing for a board discussion on the impact of a constantly strengthening Swiss franc. The case raises strategic issues in terms of international competitiveness, financial reporting issues of how to report the impact of inflation and currency changes, as well as financial management issues on how to protect against adverse currency movements.
Swot Analysis of "CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations" written by Hugo E.R. Uyterhoeven includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Currency Inflation facing as an external strategic factors. Some of the topics covered in CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations case study are - Strategic Management Strategies, Competitive strategy, Currency, Financial management, International business, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations casestudy better are - – increasing energy prices, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Currency Inflation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Currency Inflation 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations can be done for the following purposes –
1. Strategic planning using facts provided in CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations case study
2. Improving business portfolio management of Currency Inflation
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 Currency Inflation
Strengths CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Currency Inflation in CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations Harvard Business Review case study are -
Successful track record of launching new products
– Currency Inflation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Currency Inflation 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.
Learning organization
- Currency Inflation 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 Currency Inflation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Currency Inflation 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Currency Inflation has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Strategy & Execution field
– Currency Inflation 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 Currency Inflation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Currency Inflation is one of the leading recruiters in the industry. Managers in the CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Currency Inflation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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
– Currency Inflation is one of the most innovative firm in sector. Manager in CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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 Currency Inflation 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.
Superior customer experience
– The customer experience strategy of Currency Inflation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Currency Inflation 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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.
Weaknesses CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations are -
Capital Spending Reduction
– Even during the low interest decade, Currency Inflation 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.
Products dominated business model
– Even though Currency Inflation 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 - CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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 Currency Inflation 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.
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 Currency Inflation supply chain. Even after few cautionary changes mentioned in the HBR case study - CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Currency Inflation vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Currency Inflation 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. Currency Inflation 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 operating costs
– Compare to the competitors, firm in the HBR case study CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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 Currency Inflation 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Currency Inflation is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Currency Inflation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Currency Inflation to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations, is just above the industry average. Currency Inflation 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations, in the dynamic environment Currency Inflation has struggled to respond to the nimble upstart competition. Currency Inflation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Hugo E.R. Uyterhoeven suggests that, Currency Inflation 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Currency Inflation 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.
Opportunities CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations | 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations are -
Developing new processes and practices
– Currency Inflation 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.
Building a culture of innovation
– managers at Currency Inflation 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.
Buying journey improvements
– Currency Inflation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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.
Loyalty marketing
– Currency Inflation 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.
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 Currency Inflation 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.
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. Currency Inflation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Currency Inflation 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Currency Inflation 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.
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 Currency Inflation in the consumer business. Now Currency Inflation can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Currency Inflation has opened avenues for new revenue streams for the organization in the industry. This can help Currency Inflation to build a more holistic ecosystem as suggested in the CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations case study. Currency Inflation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Currency Inflation 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 Currency Inflation to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Currency Inflation 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Currency Inflation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Currency Inflation 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations, Currency Inflation 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Currency Inflation 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations .
Increasing wage structure of Currency Inflation
– 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 Currency Inflation.
High dependence on third party suppliers
– Currency Inflation 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.
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 Currency Inflation business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Currency Inflation.
Stagnating economy with rate increase
– Currency Inflation 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.
Environmental challenges
– Currency Inflation 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. Currency Inflation can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Currency Inflation 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.
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 Currency Inflation in the Strategy & Execution sector and impact the bottomline of the organization.
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. Currency Inflation needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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 Currency Inflation needs to make to build a sustainable competitive advantage.
