DMD Compresores: Adjusting the Business Model, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of DMD Compresores: Adjusting the Business Model, Spanish Version
DMD Compresores was an Argentine SME specialized in industrial compressed air solutions. This case describes the companyA?s attempts to adapt to a new setting that hindered its path to sustained business and organizational growth. As DMD compressor sales became stagnant and profit margins were impaired by rising local costs, the company faced two new major challenges: 1) changing its culture based on using services to support sales to providing sustainable services, and 2) introducing and revising management systems to suit its new business model. What was his CEO missing as he looked for a way out of the crisis? How can they manage the key issues in order to align people and systems towards the execution of an adapted business model? Universidad de San AndrA?s' case collection
Swot Analysis of "DMD Compresores: Adjusting the Business Model, Spanish Version" written by Pedro Frias includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dmd Compresores facing as an external strategic factors. Some of the topics covered in DMD Compresores: Adjusting the Business Model, Spanish Version case study are - Strategic Management Strategies, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the DMD Compresores: Adjusting the Business Model, Spanish Version casestudy better are - – increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, technology disruption, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of DMD Compresores: Adjusting the Business Model, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DMD Compresores: Adjusting the Business Model, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dmd Compresores, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dmd Compresores 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 DMD Compresores: Adjusting the Business Model, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in DMD Compresores: Adjusting the Business Model, Spanish Version case study
2. Improving business portfolio management of Dmd Compresores
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 Dmd Compresores
Strengths DMD Compresores: Adjusting the Business Model, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dmd Compresores in DMD Compresores: Adjusting the Business Model, Spanish Version Harvard Business Review case study are -
Learning organization
- Dmd Compresores 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 Dmd Compresores is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in DMD Compresores: Adjusting the Business Model, Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Dmd Compresores 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.
Effective Research and Development (R&D)
– Dmd Compresores 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 DMD Compresores: Adjusting the Business Model, Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Dmd Compresores in the sector have low bargaining power. DMD Compresores: Adjusting the Business Model, Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dmd Compresores to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Dmd Compresores has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in DMD Compresores: Adjusting the Business Model, Spanish Version 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.
Sustainable margins compare to other players in Strategy & Execution industry
– DMD Compresores: Adjusting the Business Model, Spanish Version firm has clearly differentiated products in the market place. This has enabled Dmd Compresores to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Dmd Compresores to invest into research and development (R&D) and innovation.
High brand equity
– Dmd Compresores has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dmd Compresores to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Dmd Compresores has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dmd Compresores 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.
Strong track record of project management
– Dmd Compresores is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Dmd Compresores 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 Pedro Frias 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.
Ability to recruit top talent
– Dmd Compresores is one of the leading recruiters in the industry. Managers in the DMD Compresores: Adjusting the Business Model, Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Dmd Compresores
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dmd Compresores does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses DMD Compresores: Adjusting the Business Model, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DMD Compresores: Adjusting the Business Model, Spanish Version are -
Skills based hiring
– The stress on hiring functional specialists at Dmd Compresores 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.
Interest costs
– Compare to the competition, Dmd Compresores 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.
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 Dmd Compresores supply chain. Even after few cautionary changes mentioned in the HBR case study - DMD Compresores: Adjusting the Business Model, Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dmd Compresores vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Dmd Compresores 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Dmd Compresores 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.
Slow to strategic competitive environment developments
– As DMD Compresores: Adjusting the Business Model, Spanish Version HBR case study mentions - Dmd Compresores 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.
Lack of clear differentiation of Dmd Compresores products
– To increase the profitability and margins on the products, Dmd Compresores needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Dmd Compresores is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Dmd Compresores needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dmd Compresores to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Pedro Frias suggests that, Dmd Compresores 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.
Slow decision making process
– As mentioned earlier in the report, Dmd Compresores 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. Dmd Compresores 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dmd Compresores is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study DMD Compresores: Adjusting the Business Model, Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities DMD Compresores: Adjusting the Business Model, Spanish Version | 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 DMD Compresores: Adjusting the Business Model, Spanish Version are -
Buying journey improvements
– Dmd Compresores can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DMD Compresores: Adjusting the Business Model, Spanish Version 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.
Using analytics as competitive advantage
– Dmd Compresores 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 DMD Compresores: Adjusting the Business Model, Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dmd Compresores to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Dmd Compresores 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.
Better consumer reach
– The expansion of the 5G network will help Dmd Compresores to increase its market reach. Dmd Compresores 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dmd Compresores 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dmd Compresores 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 Dmd Compresores to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dmd Compresores can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Dmd Compresores has opened avenues for new revenue streams for the organization in the industry. This can help Dmd Compresores to build a more holistic ecosystem as suggested in the DMD Compresores: Adjusting the Business Model, Spanish Version case study. Dmd Compresores can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dmd Compresores is facing challenges because of the dominance of functional experts in the organization. DMD Compresores: Adjusting the Business Model, Spanish Version 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.
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. Dmd Compresores 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. Dmd Compresores 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.
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 Dmd Compresores in the consumer business. Now Dmd Compresores can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dmd Compresores can use these opportunities to build new business models that can help the communities that Dmd Compresores operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Dmd Compresores 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.
Threats DMD Compresores: Adjusting the Business Model, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DMD Compresores: Adjusting the Business Model, Spanish Version are -
Stagnating economy with rate increase
– Dmd Compresores 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.
High dependence on third party suppliers
– Dmd Compresores 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dmd Compresores 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study DMD Compresores: Adjusting the Business Model, Spanish Version, Dmd Compresores 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.
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. Dmd Compresores can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dmd Compresores 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 Dmd Compresores business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Dmd Compresores 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.
Shortening product life cycle
– it is one of the major threat that Dmd Compresores is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Dmd Compresores 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. Dmd Compresores can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dmd Compresores 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 DMD Compresores: Adjusting the Business Model, Spanish Version .
Weighted SWOT Analysis of DMD Compresores: Adjusting the Business Model, Spanish Version 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 DMD Compresores: Adjusting the Business Model, Spanish Version 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 DMD Compresores: Adjusting the Business Model, Spanish Version 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 DMD Compresores: Adjusting the Business Model, Spanish Version 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 DMD Compresores: Adjusting the Business Model, Spanish Version 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 Dmd Compresores needs to make to build a sustainable competitive advantage.