Swot Analysis of "ABB Flexible Automation (B): Global Strategy for the Millennium" written by Martha Lanning, Jean-Pierre Jeannet includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abb Millennium facing as an external strategic factors. Some of the topics covered in ABB Flexible Automation (B): Global Strategy for the Millennium case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the ABB Flexible Automation (B): Global Strategy for the Millennium casestudy better are - – challanges to central banks by blockchain based private currencies, wage bills are increasing, central banks are concerned over increasing inflation, increasing transportation and logistics costs, supply chains are disrupted by pandemic , 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%,
cloud computing is disrupting traditional business models, increasing energy prices, etc
Introduction to SWOT Analysis of ABB Flexible Automation (B): Global Strategy for the Millennium
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ABB Flexible Automation (B): Global Strategy for the Millennium case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abb Millennium, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abb Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium can be done for the following purposes –
1. Strategic planning using facts provided in ABB Flexible Automation (B): Global Strategy for the Millennium case study
2. Improving business portfolio management of Abb Millennium
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 Abb Millennium
Strengths ABB Flexible Automation (B): Global Strategy for the Millennium | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abb Millennium in ABB Flexible Automation (B): Global Strategy for the Millennium Harvard Business Review case study are -
Learning organization
- Abb Millennium 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 Abb Millennium is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ABB Flexible Automation (B): Global Strategy for the Millennium Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Abb Millennium
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Abb Millennium does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Abb Millennium has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ABB Flexible Automation (B): Global Strategy for the Millennium 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.
Ability to lead change in Strategy & Execution field
– Abb Millennium 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 Abb Millennium in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Abb Millennium is present in almost all the verticals within the industry. This has provided firm in ABB Flexible Automation (B): Global Strategy for the Millennium 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.
Ability to recruit top talent
– Abb Millennium is one of the leading recruiters in the industry. Managers in the ABB Flexible Automation (B): Global Strategy for the Millennium are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Abb Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the ABB Flexible Automation (B): Global Strategy for the Millennium 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 switching costs
– The high switching costs that Abb Millennium 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.
Strong track record of project management
– Abb Millennium is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Abb Millennium 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
– ABB Flexible Automation (B): Global Strategy for the Millennium firm has clearly differentiated products in the market place. This has enabled Abb Millennium to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Abb Millennium to invest into research and development (R&D) and innovation.
Weaknesses ABB Flexible Automation (B): Global Strategy for the Millennium | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ABB Flexible Automation (B): Global Strategy for the Millennium are -
High operating costs
– Compare to the competitors, firm in the HBR case study ABB Flexible Automation (B): Global Strategy for the Millennium 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 Abb Millennium 's lucrative customers.
Lack of clear differentiation of Abb Millennium products
– To increase the profitability and margins on the products, Abb Millennium needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Abb Millennium is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Abb Millennium needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abb Millennium to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Martha Lanning, Jean-Pierre Jeannet suggests that, Abb Millennium 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.
No frontier risks strategy
– After analyzing the HBR case study ABB Flexible Automation (B): Global Strategy for the Millennium, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Abb Millennium 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.
Need for greater diversity
– Abb Millennium 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Abb Millennium is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ABB Flexible Automation (B): Global Strategy for the Millennium can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ABB Flexible Automation (B): Global Strategy for the Millennium, in the dynamic environment Abb Millennium has struggled to respond to the nimble upstart competition. Abb Millennium has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ABB Flexible Automation (B): Global Strategy for the Millennium, is just above the industry average. Abb Millennium 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ABB Flexible Automation (B): Global Strategy for the Millennium, it seems that the employees of Abb Millennium 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.
Opportunities ABB Flexible Automation (B): Global Strategy for the Millennium | 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 ABB Flexible Automation (B): Global Strategy for the Millennium are -
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 Abb Millennium in the consumer business. Now Abb Millennium can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Abb Millennium can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Creating value in data economy
– The success of analytics program of Abb Millennium has opened avenues for new revenue streams for the organization in the industry. This can help Abb Millennium to build a more holistic ecosystem as suggested in the ABB Flexible Automation (B): Global Strategy for the Millennium case study. Abb Millennium can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Abb Millennium 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, ABB Flexible Automation (B): Global Strategy for the Millennium, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Abb Millennium 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abb Millennium can use these opportunities to build new business models that can help the communities that Abb Millennium operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Abb Millennium can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Abb Millennium 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.
Loyalty marketing
– Abb Millennium 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 Abb Millennium to increase its market reach. Abb Millennium 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.
Developing new processes and practices
– Abb Millennium 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. Abb Millennium 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. Abb Millennium 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.
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 Abb Millennium 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.
Threats ABB Flexible Automation (B): Global Strategy for the Millennium External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ABB Flexible Automation (B): Global Strategy for the Millennium are -
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. Abb Millennium can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Abb Millennium 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. Abb Millennium can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Abb Millennium needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Abb Millennium in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Abb Millennium 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ABB Flexible Automation (B): Global Strategy for the Millennium, Abb Millennium may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Abb Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium .
Shortening product life cycle
– it is one of the major threat that Abb Millennium is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Abb Millennium.
Consumer confidence and its impact on Abb Millennium 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.
Increasing wage structure of Abb Millennium
– 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 Abb Millennium.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Abb Millennium 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.
Weighted SWOT Analysis of ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium 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 Abb Millennium needs to make to build a sustainable competitive advantage.
