The Six CEOs of Tyco International Ltd. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of The Six CEOs of Tyco International Ltd.
In September 2016, Johnson Controls, Inc., completed the acquisition of Tyco International PLC, a $9.9 billion business with operating profits of $884 million. The purchase consideration was $14.4 billion. Although the deal was billed as a merger, Ireland-based Tyco effectively acquired U.S.-based Johnson Controls in a tax inversion deal that saved $150 million a year in taxes. Operating synergies were estimated at $500 million over three years. Tyco International was all that remained of what 15 years earlier, in 2001, had been a $36.4 billion conglomerate with a market capitalization of $120 billion. It took the charismatic CEO, Dennis Kozlowski, 10 years to grow the business from $3 billion to $36 billion, increasing its value by more than 60 times along the way. But Kozlowski went to prison on fraud charges in 2005, and the portfolio was slowly unwound under his successor. Now in 2016, Tyco was to disappear.
Swot Analysis of "The Six CEOs of Tyco International Ltd." written by John R. Wells, Gabriel Ellsworth includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tyco Billion facing as an external strategic factors. Some of the topics covered in The Six CEOs of Tyco International Ltd. case study are - Strategic Management Strategies, Business history, Business law, Business models, Communication, Competition, Crisis management, Design, Ethics, Executive compensation, Financial management, Growth strategy, Marketing, Mergers & acquisitions, Performance measurement, Regulation, Reorganization, Risk management, Workspaces and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Six CEOs of Tyco International Ltd. casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing energy prices, increasing government debt because of Covid-19 spendings,
cloud computing is disrupting traditional business models, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of The Six CEOs of Tyco International Ltd.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Six CEOs of Tyco International Ltd. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tyco Billion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tyco Billion 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 The Six CEOs of Tyco International Ltd. can be done for the following purposes –
1. Strategic planning using facts provided in The Six CEOs of Tyco International Ltd. case study
2. Improving business portfolio management of Tyco Billion
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 Tyco Billion
Strengths The Six CEOs of Tyco International Ltd. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tyco Billion in The Six CEOs of Tyco International Ltd. Harvard Business Review case study are -
Effective Research and Development (R&D)
– Tyco Billion 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 The Six CEOs of Tyco International Ltd. - 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
– Tyco Billion 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 John R. Wells, Gabriel Ellsworth 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.
Operational resilience
– The operational resilience strategy in the The Six CEOs of Tyco International Ltd. 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.
Organizational Resilience of Tyco Billion
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tyco Billion does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– The Six CEOs of Tyco International Ltd. firm has clearly differentiated products in the market place. This has enabled Tyco Billion to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tyco Billion to invest into research and development (R&D) and innovation.
Learning organization
- Tyco Billion 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 Tyco Billion is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Six CEOs of Tyco International Ltd. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Tyco Billion in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Tyco Billion has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tyco Billion to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Tyco Billion 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 The Six CEOs of Tyco International Ltd. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Tyco Billion has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Six CEOs of Tyco International Ltd. 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.
Low bargaining power of suppliers
– Suppliers of Tyco Billion in the sector have low bargaining power. The Six CEOs of Tyco International Ltd. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tyco Billion to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Tyco Billion is present in almost all the verticals within the industry. This has provided firm in The Six CEOs of Tyco International Ltd. 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.
Weaknesses The Six CEOs of Tyco International Ltd. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Six CEOs of Tyco International Ltd. are -
High cash cycle compare to competitors
Tyco Billion 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.
Increasing silos among functional specialists
– The organizational structure of Tyco Billion is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Tyco Billion needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tyco Billion to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As The Six CEOs of Tyco International Ltd. HBR case study mentions - Tyco Billion 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The Six CEOs of Tyco International Ltd. 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 Tyco Billion 's lucrative customers.
Lack of clear differentiation of Tyco Billion products
– To increase the profitability and margins on the products, Tyco Billion needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tyco Billion is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Six CEOs of Tyco International Ltd. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Tyco Billion supply chain. Even after few cautionary changes mentioned in the HBR case study - The Six CEOs of Tyco International Ltd., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tyco Billion vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Tyco Billion has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Six CEOs of Tyco International Ltd., it seems that the employees of Tyco Billion 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.
Aligning sales with marketing
– It come across in the case study The Six CEOs of Tyco International Ltd. 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 The Six CEOs of Tyco International Ltd. can leverage the sales team experience to cultivate customer relationships as Tyco Billion is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Tyco Billion, firm in the HBR case study The Six CEOs of Tyco International Ltd. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities The Six CEOs of Tyco International Ltd. | 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 The Six CEOs of Tyco International Ltd. are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tyco Billion 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 Tyco Billion to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tyco Billion can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Tyco Billion 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.
Building a culture of innovation
– managers at Tyco Billion 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.
Buying journey improvements
– Tyco Billion can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Six CEOs of Tyco International Ltd. 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tyco Billion 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, The Six CEOs of Tyco International Ltd., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Tyco Billion in the consumer business. Now Tyco Billion can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Tyco Billion 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 The Six CEOs of Tyco International Ltd. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tyco Billion to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tyco Billion can use these opportunities to build new business models that can help the communities that Tyco Billion operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Tyco Billion 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.
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. Tyco Billion can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tyco Billion is facing challenges because of the dominance of functional experts in the organization. The Six CEOs of Tyco International Ltd. 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.
Learning at scale
– Online learning technologies has now opened space for Tyco Billion 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.
Threats The Six CEOs of Tyco International Ltd. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Six CEOs of Tyco International Ltd. are -
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. Tyco Billion needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Tyco Billion 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.
Increasing wage structure of Tyco Billion
– 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 Tyco Billion.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tyco Billion 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 The Six CEOs of Tyco International Ltd. .
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.
Regulatory challenges
– Tyco Billion 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.
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 Tyco Billion in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tyco Billion with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tyco Billion 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
– Tyco Billion has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Tyco Billion 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Six CEOs of Tyco International Ltd., Tyco Billion 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 .
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. Tyco Billion can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of The Six CEOs of Tyco International Ltd. 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 The Six CEOs of Tyco International Ltd. 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 The Six CEOs of Tyco International Ltd. 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 The Six CEOs of Tyco International Ltd. 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 The Six CEOs of Tyco International Ltd. 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 Tyco Billion needs to make to build a sustainable competitive advantage.