Toward a Single European Sky SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Toward a Single European Sky
To meet rising traffic projections over the next 20 years, Eurocontrol must develop Europe's first uniform air traffic control standards. This case illustrates the usefulness of management science methods for obtaining agreement and commitment among stakeholders.
Swot Analysis of "Toward a Single European Sky" written by Yael Grushka-Cockayne, Bert De Reyck includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Traffic Eurocontrol facing as an external strategic factors. Some of the topics covered in Toward a Single European Sky case study are - Strategic Management Strategies, Decision making and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Toward a Single European Sky casestudy better are - – there is increasing trade war between United States & China, wage bills are increasing, geopolitical disruptions, there is backlash against globalization, technology disruption, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Toward a Single European Sky
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Toward a Single European Sky case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Traffic Eurocontrol, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Traffic Eurocontrol 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 Toward a Single European Sky can be done for the following purposes –
1. Strategic planning using facts provided in Toward a Single European Sky case study
2. Improving business portfolio management of Traffic Eurocontrol
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 Traffic Eurocontrol
Strengths Toward a Single European Sky | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Traffic Eurocontrol in Toward a Single European Sky Harvard Business Review case study are -
Highly skilled collaborators
– Traffic Eurocontrol 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 Toward a Single European Sky HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Traffic Eurocontrol is one of the leading recruiters in the industry. Managers in the Toward a Single European Sky are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Traffic Eurocontrol 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.
High brand equity
– Traffic Eurocontrol has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Traffic Eurocontrol to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Traffic Eurocontrol is present in almost all the verticals within the industry. This has provided firm in Toward a Single European Sky 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.
Innovation driven organization
– Traffic Eurocontrol is one of the most innovative firm in sector. Manager in Toward a Single European Sky Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Traffic Eurocontrol 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 Toward a Single European Sky - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Traffic Eurocontrol 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 Yael Grushka-Cockayne, Bert De Reyck 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Toward a Single European Sky firm has clearly differentiated products in the market place. This has enabled Traffic Eurocontrol to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Traffic Eurocontrol to invest into research and development (R&D) and innovation.
Training and development
– Traffic Eurocontrol has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Toward a Single European Sky 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Traffic Eurocontrol digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Traffic Eurocontrol 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.
Low bargaining power of suppliers
– Suppliers of Traffic Eurocontrol in the sector have low bargaining power. Toward a Single European Sky has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Traffic Eurocontrol to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Toward a Single European Sky | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Toward a Single European Sky are -
Workers concerns about automation
– As automation is fast increasing in the segment, Traffic Eurocontrol 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.
Products dominated business model
– Even though Traffic Eurocontrol 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 - Toward a Single European Sky should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Traffic Eurocontrol 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.
Capital Spending Reduction
– Even during the low interest decade, Traffic Eurocontrol 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Toward a Single European Sky, is just above the industry average. Traffic Eurocontrol 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 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 Traffic Eurocontrol supply chain. Even after few cautionary changes mentioned in the HBR case study - Toward a Single European Sky, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Traffic Eurocontrol vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Traffic Eurocontrol, firm in the HBR case study Toward a Single European Sky needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Traffic Eurocontrol 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.
Increasing silos among functional specialists
– The organizational structure of Traffic Eurocontrol is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Traffic Eurocontrol needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Traffic Eurocontrol to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Toward a Single European Sky, in the dynamic environment Traffic Eurocontrol has struggled to respond to the nimble upstart competition. Traffic Eurocontrol has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Traffic Eurocontrol products
– To increase the profitability and margins on the products, Traffic Eurocontrol needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Toward a Single European Sky | 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 Toward a Single European Sky are -
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 Traffic Eurocontrol 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.
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. Traffic Eurocontrol 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. Traffic Eurocontrol 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.
Using analytics as competitive advantage
– Traffic Eurocontrol 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 Toward a Single European Sky - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Traffic Eurocontrol to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Traffic Eurocontrol 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Traffic Eurocontrol 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.
Loyalty marketing
– Traffic Eurocontrol 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.
Learning at scale
– Online learning technologies has now opened space for Traffic Eurocontrol 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.
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. Traffic Eurocontrol can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Traffic Eurocontrol 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Traffic Eurocontrol can use these opportunities to build new business models that can help the communities that Traffic Eurocontrol operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Traffic Eurocontrol to increase its market reach. Traffic Eurocontrol 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.
Creating value in data economy
– The success of analytics program of Traffic Eurocontrol has opened avenues for new revenue streams for the organization in the industry. This can help Traffic Eurocontrol to build a more holistic ecosystem as suggested in the Toward a Single European Sky case study. Traffic Eurocontrol can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Traffic Eurocontrol 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 Traffic Eurocontrol to hire the very best people irrespective of their geographical location.
Threats Toward a Single European Sky External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Toward a Single European Sky are -
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 Traffic Eurocontrol.
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. Traffic Eurocontrol 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.
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. Traffic Eurocontrol needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Traffic Eurocontrol 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Traffic Eurocontrol 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.
Technology acceleration in Forth Industrial Revolution
– Traffic Eurocontrol has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Traffic Eurocontrol 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.
Increasing wage structure of Traffic Eurocontrol
– 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 Traffic Eurocontrol.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Toward a Single European Sky, Traffic Eurocontrol 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Traffic Eurocontrol with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Traffic Eurocontrol 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.
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 Traffic Eurocontrol business can come under increasing regulations regarding data privacy, data security, etc.
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 Traffic Eurocontrol in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Traffic Eurocontrol 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 Toward a Single European Sky .
Weighted SWOT Analysis of Toward a Single European Sky 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 Toward a Single European Sky 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 Toward a Single European Sky 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 Toward a Single European Sky 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 Toward a Single European Sky 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 Traffic Eurocontrol needs to make to build a sustainable competitive advantage.
