The Timken Company (A2): Selling to Peugeot SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Timken Company (A2): Selling to Peugeot
In 1995, at a turning point in the history of the bearings industry, the Timken Company acquires a high-volume bearings plant in Poland. Minor differences from Timken's traditional technology and products assume major importance as the acquisition is integrated, leading to fundamental shifts in the company's value proposition and organization.
Swot Analysis of "The Timken Company (A2): Selling to Peugeot" written by Yves L. Doz, Mark Hunter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Timken Bearings facing as an external strategic factors. Some of the topics covered in The Timken Company (A2): Selling to Peugeot case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Timken Company (A2): Selling to Peugeot casestudy better are - – talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , technology disruption, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is increasing trade war between United States & China, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of The Timken Company (A2): Selling to Peugeot
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Timken Company (A2): Selling to Peugeot case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Timken Bearings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Timken Bearings 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 Timken Company (A2): Selling to Peugeot can be done for the following purposes –
1. Strategic planning using facts provided in The Timken Company (A2): Selling to Peugeot case study
2. Improving business portfolio management of Timken Bearings
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 Timken Bearings
Strengths The Timken Company (A2): Selling to Peugeot | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Timken Bearings in The Timken Company (A2): Selling to Peugeot Harvard Business Review case study are -
High brand equity
– Timken Bearings has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Timken Bearings to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– The Timken Company (A2): Selling to Peugeot firm has clearly differentiated products in the market place. This has enabled Timken Bearings to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Timken Bearings to invest into research and development (R&D) and innovation.
Training and development
– Timken Bearings has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Timken Company (A2): Selling to Peugeot 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.
Diverse revenue streams
– Timken Bearings is present in almost all the verticals within the industry. This has provided firm in The Timken Company (A2): Selling to Peugeot 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.
Successful track record of launching new products
– Timken Bearings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Timken Bearings 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.
Analytics focus
– Timken Bearings 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, Mark Hunter 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.
Ability to recruit top talent
– Timken Bearings is one of the leading recruiters in the industry. Managers in the The Timken Company (A2): Selling to Peugeot 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 Timken Bearings 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.
Innovation driven organization
– Timken Bearings is one of the most innovative firm in sector. Manager in The Timken Company (A2): Selling to Peugeot Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Timken Bearings in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Timken Bearings 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.
Organizational Resilience of Timken Bearings
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Timken Bearings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses The Timken Company (A2): Selling to Peugeot | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Timken Company (A2): Selling to Peugeot are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Timken Company (A2): Selling to Peugeot, it seems that the employees of Timken Bearings 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 Timken Company (A2): Selling to Peugeot 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 Timken Company (A2): Selling to Peugeot can leverage the sales team experience to cultivate customer relationships as Timken Bearings is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As The Timken Company (A2): Selling to Peugeot HBR case study mentions - Timken Bearings 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 cash cycle compare to competitors
Timken Bearings 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.
Products dominated business model
– Even though Timken Bearings 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 - The Timken Company (A2): Selling to Peugeot should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Timken Bearings 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Timken Bearings is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Timken Company (A2): Selling to Peugeot 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 Timken Bearings supply chain. Even after few cautionary changes mentioned in the HBR case study - The Timken Company (A2): Selling to Peugeot, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Timken Bearings vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Timken Bearings products
– To increase the profitability and margins on the products, Timken Bearings needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study The Timken Company (A2): Selling to Peugeot 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 Timken Bearings 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Timken Bearings 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.
Opportunities The Timken Company (A2): Selling to Peugeot | 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 Timken Company (A2): Selling to Peugeot are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Timken Bearings 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 Timken Bearings 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.
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 Timken Bearings 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.
Manufacturing automation
– Timken Bearings 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.
Better consumer reach
– The expansion of the 5G network will help Timken Bearings to increase its market reach. Timken Bearings 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.
Using analytics as competitive advantage
– Timken Bearings 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 Timken Company (A2): Selling to Peugeot - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Timken Bearings to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Timken Bearings can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Timken Company (A2): Selling to Peugeot 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.
Loyalty marketing
– Timken Bearings 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Timken Bearings 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 Timken Bearings to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Timken Bearings is facing challenges because of the dominance of functional experts in the organization. The Timken Company (A2): Selling to Peugeot 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.
Creating value in data economy
– The success of analytics program of Timken Bearings has opened avenues for new revenue streams for the organization in the industry. This can help Timken Bearings to build a more holistic ecosystem as suggested in the The Timken Company (A2): Selling to Peugeot case study. Timken Bearings can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Timken Bearings 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.
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. Timken Bearings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats The Timken Company (A2): Selling to Peugeot External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Timken Company (A2): Selling to Peugeot are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Timken Bearings can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Timken Bearings needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Timken Company (A2): Selling to Peugeot, Timken Bearings 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 .
Stagnating economy with rate increase
– Timken Bearings 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.
Increasing wage structure of Timken Bearings
– 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 Timken Bearings.
Shortening product life cycle
– it is one of the major threat that Timken Bearings is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Timken Bearings.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Timken Bearings 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.
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 Timken Bearings business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Timken Bearings 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. Timken Bearings can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Timken Bearings 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Timken Bearings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Timken Bearings in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of The Timken Company (A2): Selling to Peugeot 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 Timken Company (A2): Selling to Peugeot 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 Timken Company (A2): Selling to Peugeot 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 Timken Company (A2): Selling to Peugeot 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 Timken Company (A2): Selling to Peugeot 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 Timken Bearings needs to make to build a sustainable competitive advantage.
