Cembrit Holding A/S: At a Crossroads SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cembrit Holding A/S: At a Crossroads
Cembrit Holding A/S (Cembrit), the second-largest producer of fibre cement products in Europe, had experienced a period of restructuring, acquisitions, and consolidation as a result of having acquired fibre cement companies involved in production, sales, and distribution throughout Europe and closing down its own production in Denmark. After years of restructuring and struggling, growth had finally picked up, with turnover reaching an average of 11 per cent per year between 2003 and 2007. As of 2008, however, Cembrit faced numerous challenges: building and strengthening its new corporate identity; repositioning itself in the market; identifying opportunities for organic growth; transitioning to asbestos-free production; and determining its future within its parent company. How it addressed these challenges would affect Cembrit's future well beyond 2008, including whether it would be retained or divested by its parent company. Romeo Turcan is affiliated with Aalborg University.
Swot Analysis of "Cembrit Holding A/S: At a Crossroads" written by Romeo V. Turcan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cembrit Fibre facing as an external strategic factors. Some of the topics covered in Cembrit Holding A/S: At a Crossroads case study are - Strategic Management Strategies, Manufacturing, Marketing, Regulation and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Cembrit Holding A/S: At a Crossroads casestudy better are - – wage bills are increasing, geopolitical disruptions, challanges to central banks by blockchain based private currencies, technology disruption, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China,
increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Cembrit Holding A/S: At a Crossroads
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cembrit Holding A/S: At a Crossroads case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cembrit Fibre, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cembrit Fibre 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 Cembrit Holding A/S: At a Crossroads can be done for the following purposes –
1. Strategic planning using facts provided in Cembrit Holding A/S: At a Crossroads case study
2. Improving business portfolio management of Cembrit Fibre
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 Cembrit Fibre
Strengths Cembrit Holding A/S: At a Crossroads | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cembrit Fibre in Cembrit Holding A/S: At a Crossroads Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Cembrit Fibre 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.
Superior customer experience
– The customer experience strategy of Cembrit Fibre in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Cembrit Fibre 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 Romeo V. Turcan 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.
Learning organization
- Cembrit Fibre 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 Cembrit Fibre is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cembrit Holding A/S: At a Crossroads Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Cembrit Fibre
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cembrit Fibre does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Cembrit Fibre is one of the leading recruiters in the industry. Managers in the Cembrit Holding A/S: At a Crossroads are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Cembrit Fibre has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cembrit Holding A/S: At a Crossroads 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 Cembrit Fibre in the sector have low bargaining power. Cembrit Holding A/S: At a Crossroads has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cembrit Fibre to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Cembrit Fibre has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cembrit Fibre 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.
Operational resilience
– The operational resilience strategy in the Cembrit Holding A/S: At a Crossroads 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 brand equity
– Cembrit Fibre has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cembrit Fibre to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Cembrit Fibre digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cembrit Fibre has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Cembrit Holding A/S: At a Crossroads | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cembrit Holding A/S: At a Crossroads are -
High cash cycle compare to competitors
Cembrit Fibre 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cembrit Holding A/S: At a Crossroads, it seems that the employees of Cembrit Fibre 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.
Slow decision making process
– As mentioned earlier in the report, Cembrit Fibre has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Cembrit Fibre even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, firm in the HBR case study Cembrit Holding A/S: At a Crossroads 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 Cembrit Fibre 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cembrit Fibre is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cembrit Holding A/S: At a Crossroads can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Cembrit Fibre is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Cembrit Fibre needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cembrit Fibre to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Cembrit Fibre 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 Cembrit Holding A/S: At a Crossroads, is just above the industry average. Cembrit Fibre 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.
Aligning sales with marketing
– It come across in the case study Cembrit Holding A/S: At a Crossroads 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 Cembrit Holding A/S: At a Crossroads can leverage the sales team experience to cultivate customer relationships as Cembrit Fibre is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Romeo V. Turcan suggests that, Cembrit Fibre 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.
Lack of clear differentiation of Cembrit Fibre products
– To increase the profitability and margins on the products, Cembrit Fibre needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Cembrit Holding A/S: At a Crossroads | 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 Cembrit Holding A/S: At a Crossroads are -
Developing new processes and practices
– Cembrit Fibre 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
– Cembrit Fibre 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.
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. Cembrit Fibre can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cembrit Fibre can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Cembrit Fibre 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cembrit Fibre 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 Cembrit Fibre 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cembrit Fibre 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, Cembrit Holding A/S: At a Crossroads, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Cembrit Fibre can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cembrit Holding A/S: At a Crossroads 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.
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. Cembrit Fibre 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. Cembrit Fibre 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.
Creating value in data economy
– The success of analytics program of Cembrit Fibre has opened avenues for new revenue streams for the organization in the industry. This can help Cembrit Fibre to build a more holistic ecosystem as suggested in the Cembrit Holding A/S: At a Crossroads case study. Cembrit Fibre can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Cembrit Fibre in the consumer business. Now Cembrit Fibre can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Cembrit Fibre 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 Cembrit Holding A/S: At a Crossroads - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cembrit Fibre to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Cembrit Holding A/S: At a Crossroads External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cembrit Holding A/S: At a Crossroads 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. Cembrit Fibre needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cembrit Fibre 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 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.
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. Cembrit Fibre 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. Cembrit Fibre 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.
Shortening product life cycle
– it is one of the major threat that Cembrit Fibre is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cembrit Fibre 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 Cembrit Holding A/S: At a Crossroads .
Stagnating economy with rate increase
– Cembrit Fibre 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.
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 Cembrit Fibre in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Cembrit Fibre
– 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 Cembrit Fibre.
Technology acceleration in Forth Industrial Revolution
– Cembrit Fibre has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Cembrit Fibre 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.
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 Cembrit Fibre business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Cembrit Holding A/S: At a Crossroads 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 Cembrit Holding A/S: At a Crossroads 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 Cembrit Holding A/S: At a Crossroads 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 Cembrit Holding A/S: At a Crossroads 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 Cembrit Holding A/S: At a Crossroads 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 Cembrit Fibre needs to make to build a sustainable competitive advantage.
