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 commodity prices, increasing transportation and logistics costs, wage bills are increasing, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, geopolitical disruptions,
customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, 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 -
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.
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.
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.
Organizational Resilience of Currency Inflation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Currency Inflation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations firm has clearly differentiated products in the market place. This has enabled Currency Inflation to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Currency Inflation to invest into research and development (R&D) and innovation.
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.
Analytics focus
– Currency Inflation 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 Hugo E.R. Uyterhoeven 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Currency Inflation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Currency Inflation has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Currency Inflation in the sector have low bargaining power. CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Currency Inflation to manage not only supply disruptions but also source products at highly competitive prices.
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.
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 -
No frontier risks strategy
– After analyzing the HBR case study CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations, 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.
Slow to strategic competitive environment developments
– As CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations HBR case study mentions - Currency Inflation 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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations, it seems that the employees of Currency Inflation don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High cash cycle compare to competitors
Currency Inflation 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.
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.
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.
Low market penetration in new markets
– Outside its home market of Currency Inflation, firm in the HBR case study CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Currency Inflation can use these opportunities to build new business models that can help the communities that Currency Inflation operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Currency Inflation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Currency Inflation 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 CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Currency Inflation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Manufacturing automation
– Currency Inflation 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.
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.
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.
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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Currency Inflation is facing challenges because of the dominance of functional experts in the organization. CIBA-GEIGY AG: Impact of Inflation and Currency Fluctuations 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.
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 -
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.
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 .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Currency Inflation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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 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.
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. Currency Inflation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Currency Inflation has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Currency Inflation needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
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.