The aluminum industry has suffered from long periods of depressed prices and profits interspersed with relatively short-lived price and profit peaks. The case investigates why, this has occured, focusing on the decision Alusaf must make on whether to invest in a major new facility in the face of depressed aluminum prices. Courseware provides cost data on all the facilities in the industry to develop a supply curve. It also provides a supply and demand model that allows students to investigate: the drivers of average industry profitability and relative profitability of individual players in it; the impact of changes in demand over the economic cycle on the price of metal; the impact of different elasticities of demand on price and profitability; the impact of oligopolistic pricing on industry profitability; the impact of adding capacity on industry profitability; and the ability of a firm to preempt the aluminum market. A rewritten version of an earlier case.
Swot Analysis of "Alusaf Hillside Project" written by Kenneth Corts, John R. Wells includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aluminum Alusaf facing as an external strategic factors. Some of the topics covered in Alusaf Hillside Project case study are - Strategic Management Strategies, Decision making, Economics, Financial management, Manufacturing, Pricing, Recession and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Alusaf Hillside Project casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings,
central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Alusaf Hillside Project
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alusaf Hillside Project case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aluminum Alusaf, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aluminum Alusaf 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 Alusaf Hillside Project can be done for the following purposes –
1. Strategic planning using facts provided in Alusaf Hillside Project case study
2. Improving business portfolio management of Aluminum Alusaf
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 Aluminum Alusaf
Strengths Alusaf Hillside Project | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aluminum Alusaf in Alusaf Hillside Project Harvard Business Review case study are -
Strong track record of project management
– Aluminum Alusaf is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Aluminum Alusaf is one of the leading recruiters in the industry. Managers in the Alusaf Hillside Project 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
– Aluminum Alusaf has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Alusaf Hillside Project 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.
Cross disciplinary teams
– Horizontal connected teams at the Aluminum Alusaf 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.
Diverse revenue streams
– Aluminum Alusaf is present in almost all the verticals within the industry. This has provided firm in Alusaf Hillside Project 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.
Learning organization
- Aluminum Alusaf 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 Aluminum Alusaf is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Alusaf Hillside Project Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Aluminum Alusaf has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aluminum Alusaf 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
– Aluminum Alusaf 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 Aluminum Alusaf in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Aluminum Alusaf is one of the most innovative firm in sector. Manager in Alusaf Hillside Project Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Aluminum Alusaf 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 Kenneth Corts, John R. Wells 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.
Operational resilience
– The operational resilience strategy in the Alusaf Hillside Project 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.
High brand equity
– Aluminum Alusaf has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aluminum Alusaf to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Alusaf Hillside Project | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alusaf Hillside Project are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Alusaf Hillside Project 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 Aluminum Alusaf has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aluminum Alusaf is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Alusaf Hillside Project can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Alusaf Hillside Project 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 Aluminum Alusaf 's lucrative customers.
High cash cycle compare to competitors
Aluminum Alusaf 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 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 Aluminum Alusaf supply chain. Even after few cautionary changes mentioned in the HBR case study - Alusaf Hillside Project, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aluminum Alusaf vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Aluminum Alusaf 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 - Alusaf Hillside Project should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Aluminum Alusaf is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Aluminum Alusaf needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aluminum Alusaf to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Alusaf Hillside Project, in the dynamic environment Aluminum Alusaf has struggled to respond to the nimble upstart competition. Aluminum Alusaf has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Aluminum Alusaf has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Alusaf Hillside Project HBR case study mentions - Aluminum Alusaf 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.
Aligning sales with marketing
– It come across in the case study Alusaf Hillside Project 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 Alusaf Hillside Project can leverage the sales team experience to cultivate customer relationships as Aluminum Alusaf is planning to shift buying processes online.
Opportunities Alusaf Hillside Project | 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 Alusaf Hillside Project 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, Aluminum Alusaf can use these opportunities to build new business models that can help the communities that Aluminum Alusaf operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Aluminum Alusaf has opened avenues for new revenue streams for the organization in the industry. This can help Aluminum Alusaf to build a more holistic ecosystem as suggested in the Alusaf Hillside Project case study. Aluminum Alusaf can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Aluminum Alusaf can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Alusaf Hillside Project 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.
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 Aluminum Alusaf in the consumer business. Now Aluminum Alusaf can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aluminum Alusaf 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.
Leveraging digital technologies
– Aluminum Alusaf 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
– Aluminum Alusaf 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.
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. Aluminum Alusaf can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Aluminum Alusaf 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 Alusaf Hillside Project - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aluminum Alusaf to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aluminum Alusaf 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.
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 Aluminum Alusaf 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.
Better consumer reach
– The expansion of the 5G network will help Aluminum Alusaf to increase its market reach. Aluminum Alusaf 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aluminum Alusaf is facing challenges because of the dominance of functional experts in the organization. Alusaf Hillside Project 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 Alusaf Hillside Project External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alusaf Hillside Project are -
Shortening product life cycle
– it is one of the major threat that Aluminum Alusaf is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Aluminum Alusaf 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.
Stagnating economy with rate increase
– Aluminum Alusaf 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.
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 Aluminum Alusaf.
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 Aluminum Alusaf in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Alusaf Hillside Project, Aluminum Alusaf 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.
Environmental challenges
– Aluminum Alusaf 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. Aluminum Alusaf can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Aluminum Alusaf 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. Aluminum Alusaf 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 Aluminum Alusaf
– 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 Aluminum Alusaf.
High dependence on third party suppliers
– Aluminum Alusaf 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.
Regulatory challenges
– Aluminum Alusaf 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.
Weighted SWOT Analysis of Alusaf Hillside Project 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 Alusaf Hillside Project 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 Alusaf Hillside Project 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 Alusaf Hillside Project 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 Alusaf Hillside Project 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 Aluminum Alusaf needs to make to build a sustainable competitive advantage.
