Case Study Description of ADP(A) - Condensed Version
GSI is a computer services company, the leader in payroll outsourcing in France. The company founder sees the value in selling computer services to create a recurring revenue stream. His years in the French public administration prompt him to create a decentralized and non-bureaucratic company, taking to an extreme the values of empowerment, trust and respect for the individual. Success in the 1970s and 1980s allows the company to grow by acquisition, resulting in a multi-business company with pan-European reach. The founder's ideals play a large part in achieving an employee leveraged buyout in 1987, resulting in much sought-after independence from the large French conglomerate that had given GSI its start. By the early 1990s, several factors pressure results. An economic downturn crimps sales. Huge outlays to develop software and implement a quality program pressure profitability. The plethora of business units, with totally different business models becomes unwieldy. Impatient and angered financial investors from the 1987 leveraged buyout distract top management with petitions to exit. The management team becomes increasingly dysfunctional. At the end of 1994, the founder and Chairman respond abruptly by firing half of his top managers. The Abridged version can be used as an introduction to the ADP-GSI case series on M and A.
Authors :: Yves L. Doz, Maurizio Zollo, Jeanne Larson
Swot Analysis of "ADP(A) - Condensed Version" written by Yves L. Doz, Maurizio Zollo, Jeanne Larson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gsi Adp facing as an external strategic factors. Some of the topics covered in ADP(A) - Condensed Version case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the ADP(A) - Condensed Version casestudy better are - – increasing energy prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , there is backlash against globalization, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc
Introduction to SWOT Analysis of ADP(A) - Condensed Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ADP(A) - Condensed Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gsi Adp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gsi Adp 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 ADP(A) - Condensed Version can be done for the following purposes –
1. Strategic planning using facts provided in ADP(A) - Condensed Version case study
2. Improving business portfolio management of Gsi Adp
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 Gsi Adp
Strengths ADP(A) - Condensed Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gsi Adp in ADP(A) - Condensed Version Harvard Business Review case study are -
Learning organization
- Gsi Adp 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 Gsi Adp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ADP(A) - Condensed Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Gsi Adp has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ADP(A) - Condensed 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.
Highly skilled collaborators
– Gsi Adp 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 ADP(A) - Condensed Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Gsi Adp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gsi Adp 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.
Diverse revenue streams
– Gsi Adp is present in almost all the verticals within the industry. This has provided firm in ADP(A) - Condensed Version 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.
Low bargaining power of suppliers
– Suppliers of Gsi Adp in the sector have low bargaining power. ADP(A) - Condensed Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gsi Adp to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Gsi Adp is one of the leading recruiters in the industry. Managers in the ADP(A) - Condensed 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 Gsi Adp
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gsi Adp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Gsi Adp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gsi Adp 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.
Analytics focus
– Gsi Adp 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 Yves L. Doz, Maurizio Zollo, Jeanne Larson 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.
Cross disciplinary teams
– Horizontal connected teams at the Gsi Adp 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.
Innovation driven organization
– Gsi Adp is one of the most innovative firm in sector. Manager in ADP(A) - Condensed Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses ADP(A) - Condensed Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ADP(A) - Condensed Version are -
Products dominated business model
– Even though Gsi Adp 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 - ADP(A) - Condensed Version should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Gsi Adp 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Gsi Adp 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.
Aligning sales with marketing
– It come across in the case study ADP(A) - Condensed Version 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 ADP(A) - Condensed Version can leverage the sales team experience to cultivate customer relationships as Gsi Adp is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ADP(A) - Condensed Version, is just above the industry average. Gsi Adp 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.
High operating costs
– Compare to the competitors, firm in the HBR case study ADP(A) - Condensed Version 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 Gsi Adp 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ADP(A) - Condensed Version, in the dynamic environment Gsi Adp has struggled to respond to the nimble upstart competition. Gsi Adp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study ADP(A) - Condensed Version, 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 bargaining power of channel partners
– Because of the regulatory requirements, Yves L. Doz, Maurizio Zollo, Jeanne Larson suggests that, Gsi Adp 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ADP(A) - Condensed Version, it seems that the employees of Gsi Adp 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.
Low market penetration in new markets
– Outside its home market of Gsi Adp, firm in the HBR case study ADP(A) - Condensed Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities ADP(A) - Condensed 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 ADP(A) - Condensed Version are -
Better consumer reach
– The expansion of the 5G network will help Gsi Adp to increase its market reach. Gsi Adp 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
– Gsi Adp 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.
Manufacturing automation
– Gsi Adp 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.
Building a culture of innovation
– managers at Gsi Adp 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gsi Adp 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, ADP(A) - Condensed Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gsi Adp is facing challenges because of the dominance of functional experts in the organization. ADP(A) - Condensed 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gsi Adp 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 Gsi Adp to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gsi Adp 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.
Learning at scale
– Online learning technologies has now opened space for Gsi Adp to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Gsi Adp 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.
Using analytics as competitive advantage
– Gsi Adp 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 ADP(A) - Condensed Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gsi Adp 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, Gsi Adp 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.
Creating value in data economy
– The success of analytics program of Gsi Adp has opened avenues for new revenue streams for the organization in the industry. This can help Gsi Adp to build a more holistic ecosystem as suggested in the ADP(A) - Condensed Version case study. Gsi Adp can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats ADP(A) - Condensed Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ADP(A) - Condensed Version are -
High dependence on third party suppliers
– Gsi Adp 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.
Shortening product life cycle
– it is one of the major threat that Gsi Adp is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ADP(A) - Condensed Version, Gsi Adp 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 wage structure of Gsi Adp
– 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 Gsi Adp.
Technology acceleration in Forth Industrial Revolution
– Gsi Adp has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Gsi Adp 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gsi Adp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gsi Adp 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.
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 Gsi Adp in the Strategy & Execution sector and impact the bottomline of the organization.
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. Gsi Adp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Gsi Adp 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
– Gsi Adp 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. Gsi Adp can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Gsi Adp 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gsi Adp 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 ADP(A) - Condensed Version .
Weighted SWOT Analysis of ADP(A) - Condensed 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 ADP(A) - Condensed 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 ADP(A) - Condensed 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 ADP(A) - Condensed 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 ADP(A) - Condensed 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 Gsi Adp needs to make to build a sustainable competitive advantage.
