De Beers: Addressing the New Competitiveness Challenges SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of De Beers: Addressing the New Competitiveness Challenges
Traces the development of De Beers and the diamond industry from its inception in the mid-1800s to the year 2000. Discusses De Beer's history and strategy as the industry leader and its role in industry development. Enables deep examination of the interdependence of companies and the locations and communities in which they operate and the role of a company in economic and social development. In 2000, De Beers faces critical choices about both its economic and social policies and how they interrelate.
Authors :: Michael E. Porter, Sonia Marciano, Alyson Warhurst
Topics :: Strategy & Execution
Tags :: Policy, Public relations, Social responsibility, Strategy, Supply chain, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "De Beers: Addressing the New Competitiveness Challenges" written by Michael E. Porter, Sonia Marciano, Alyson Warhurst includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beers De facing as an external strategic factors. Some of the topics covered in De Beers: Addressing the New Competitiveness Challenges case study are - Strategic Management Strategies, Policy, Public relations, Social responsibility, Strategy, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the De Beers: Addressing the New Competitiveness Challenges casestudy better are - – geopolitical disruptions, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, 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,
increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of De Beers: Addressing the New Competitiveness Challenges
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in De Beers: Addressing the New Competitiveness Challenges case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beers De, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beers De 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 De Beers: Addressing the New Competitiveness Challenges can be done for the following purposes –
1. Strategic planning using facts provided in De Beers: Addressing the New Competitiveness Challenges case study
2. Improving business portfolio management of Beers De
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 Beers De
Strengths De Beers: Addressing the New Competitiveness Challenges | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beers De in De Beers: Addressing the New Competitiveness Challenges Harvard Business Review case study are -
Innovation driven organization
– Beers De is one of the most innovative firm in sector. Manager in De Beers: Addressing the New Competitiveness Challenges Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Beers De has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beers De to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Beers De has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Beers De 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.
Effective Research and Development (R&D)
– Beers De 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 De Beers: Addressing the New Competitiveness Challenges - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Beers De 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 Beers De is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in De Beers: Addressing the New Competitiveness Challenges Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Beers De
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Beers De does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the De Beers: Addressing the New Competitiveness Challenges 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.
Cross disciplinary teams
– Horizontal connected teams at the Beers De 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.
Sustainable margins compare to other players in Strategy & Execution industry
– De Beers: Addressing the New Competitiveness Challenges firm has clearly differentiated products in the market place. This has enabled Beers De to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Beers De to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Beers De in the sector have low bargaining power. De Beers: Addressing the New Competitiveness Challenges has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beers De to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Beers De 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 De Beers: Addressing the New Competitiveness Challenges HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Beers De digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beers De 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.
Weaknesses De Beers: Addressing the New Competitiveness Challenges | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of De Beers: Addressing the New Competitiveness Challenges are -
Capital Spending Reduction
– Even during the low interest decade, Beers De 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.
No frontier risks strategy
– After analyzing the HBR case study De Beers: Addressing the New Competitiveness Challenges, 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.
High operating costs
– Compare to the competitors, firm in the HBR case study De Beers: Addressing the New Competitiveness Challenges 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 Beers De 's lucrative customers.
High cash cycle compare to competitors
Beers De 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.
Lack of clear differentiation of Beers De products
– To increase the profitability and margins on the products, Beers De needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael E. Porter, Sonia Marciano, Alyson Warhurst suggests that, Beers De 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Beers De is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study De Beers: Addressing the New Competitiveness Challenges can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As De Beers: Addressing the New Competitiveness Challenges HBR case study mentions - Beers De 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.
Need for greater diversity
– Beers De has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the De Beers: Addressing the New Competitiveness Challenges 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 Beers De has relatively successful track record of launching new products.
Products dominated business model
– Even though Beers De 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 - De Beers: Addressing the New Competitiveness Challenges should strive to include more intangible value offerings along with its core products and services.
Opportunities De Beers: Addressing the New Competitiveness Challenges | 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 De Beers: Addressing the New Competitiveness Challenges 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, Beers De can use these opportunities to build new business models that can help the communities that Beers De operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Beers De 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.
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. Beers De 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. Beers De 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.
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. Beers De can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Beers De can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. De Beers: Addressing the New Competitiveness Challenges 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, Beers De is facing challenges because of the dominance of functional experts in the organization. De Beers: Addressing the New Competitiveness Challenges 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Beers De can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, De Beers: Addressing the New Competitiveness Challenges, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Beers De 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.
Leveraging digital technologies
– Beers De 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beers De 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.
Better consumer reach
– The expansion of the 5G network will help Beers De to increase its market reach. Beers De 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.
Using analytics as competitive advantage
– Beers De 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 De Beers: Addressing the New Competitiveness Challenges - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beers De to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Beers De 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.
Threats De Beers: Addressing the New Competitiveness Challenges External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study De Beers: Addressing the New Competitiveness Challenges are -
Regulatory challenges
– Beers De 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.
Stagnating economy with rate increase
– Beers De 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.
Technology acceleration in Forth Industrial Revolution
– Beers De has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Beers De 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.
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. Beers De 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.
Environmental challenges
– Beers De 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. Beers De 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, Beers De 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 De Beers: Addressing the New Competitiveness Challenges .
Consumer confidence and its impact on Beers De 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.
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 Beers De 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 De Beers: Addressing the New Competitiveness Challenges, Beers De 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 .
High dependence on third party suppliers
– Beers De 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.
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.
Shortening product life cycle
– it is one of the major threat that Beers De is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Beers De
– 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 Beers De.
Weighted SWOT Analysis of De Beers: Addressing the New Competitiveness Challenges 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 De Beers: Addressing the New Competitiveness Challenges 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 De Beers: Addressing the New Competitiveness Challenges 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 De Beers: Addressing the New Competitiveness Challenges 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 De Beers: Addressing the New Competitiveness Challenges 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 Beers De needs to make to build a sustainable competitive advantage.