Case Study Description of Peterson Industries: Louis Friedman
Louis Friedman, the president and CEO of Peterson Industries, must make decisions about two engineering projects and the level at which they should be funded. In the process, he must manage the overall resource allocation process and the company. A rewritten version of an earlier case.
Swot Analysis of "Peterson Industries: Louis Friedman" written by David A. Garvin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Friedman Peterson facing as an external strategic factors. Some of the topics covered in Peterson Industries: Louis Friedman case study are - Strategic Management Strategies, Design, Motivating people, Project management, Strategic planning, Strategy execution, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Peterson Industries: Louis Friedman casestudy better are - – supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, cloud computing is disrupting traditional business models,
there is increasing trade war between United States & China, geopolitical disruptions, etc
Introduction to SWOT Analysis of Peterson Industries: Louis Friedman
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Peterson Industries: Louis Friedman case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Friedman Peterson, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Friedman Peterson 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 Peterson Industries: Louis Friedman can be done for the following purposes –
1. Strategic planning using facts provided in Peterson Industries: Louis Friedman case study
2. Improving business portfolio management of Friedman Peterson
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 Friedman Peterson
Strengths Peterson Industries: Louis Friedman | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Friedman Peterson in Peterson Industries: Louis Friedman Harvard Business Review case study are -
Strong track record of project management
– Friedman Peterson is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Friedman Peterson 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 David A. Garvin 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.
Diverse revenue streams
– Friedman Peterson is present in almost all the verticals within the industry. This has provided firm in Peterson Industries: Louis Friedman case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Friedman Peterson in the sector have low bargaining power. Peterson Industries: Louis Friedman has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Friedman Peterson to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Friedman Peterson is one of the leading recruiters in the industry. Managers in the Peterson Industries: Louis Friedman 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 Friedman Peterson 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
– Friedman Peterson has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Friedman Peterson to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Friedman Peterson has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Peterson Industries: Louis Friedman 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Peterson Industries: Louis Friedman firm has clearly differentiated products in the market place. This has enabled Friedman Peterson to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Friedman Peterson to invest into research and development (R&D) and innovation.
Learning organization
- Friedman Peterson 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 Friedman Peterson is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Peterson Industries: Louis Friedman Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Peterson Industries: Louis Friedman 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.
Innovation driven organization
– Friedman Peterson is one of the most innovative firm in sector. Manager in Peterson Industries: Louis Friedman Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Peterson Industries: Louis Friedman | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Peterson Industries: Louis Friedman are -
Products dominated business model
– Even though Friedman Peterson 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 - Peterson Industries: Louis Friedman should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, David A. Garvin suggests that, Friedman Peterson 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.
Slow to strategic competitive environment developments
– As Peterson Industries: Louis Friedman HBR case study mentions - Friedman Peterson 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 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 Friedman Peterson supply chain. Even after few cautionary changes mentioned in the HBR case study - Peterson Industries: Louis Friedman, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Friedman Peterson vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Friedman Peterson 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.
Aligning sales with marketing
– It come across in the case study Peterson Industries: Louis Friedman 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 Peterson Industries: Louis Friedman can leverage the sales team experience to cultivate customer relationships as Friedman Peterson is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Friedman Peterson 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Friedman Peterson is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Peterson Industries: Louis Friedman can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Friedman Peterson 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Peterson Industries: Louis Friedman 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 Friedman Peterson 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Peterson Industries: Louis Friedman, is just above the industry average. Friedman Peterson 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.
Opportunities Peterson Industries: Louis Friedman | 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 Peterson Industries: Louis Friedman are -
Learning at scale
– Online learning technologies has now opened space for Friedman Peterson 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. Friedman Peterson can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Friedman Peterson 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.
Better consumer reach
– The expansion of the 5G network will help Friedman Peterson to increase its market reach. Friedman Peterson 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.
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 Friedman Peterson 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. Friedman Peterson 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. Friedman Peterson 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Friedman Peterson 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, Peterson Industries: Louis Friedman, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Friedman Peterson 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.
Buying journey improvements
– Friedman Peterson can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Peterson Industries: Louis Friedman 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.
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. Friedman Peterson can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Friedman Peterson 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.
Creating value in data economy
– The success of analytics program of Friedman Peterson has opened avenues for new revenue streams for the organization in the industry. This can help Friedman Peterson to build a more holistic ecosystem as suggested in the Peterson Industries: Louis Friedman case study. Friedman Peterson can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Friedman Peterson 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 Peterson Industries: Louis Friedman - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Friedman Peterson to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Peterson Industries: Louis Friedman External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Peterson Industries: Louis Friedman 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. Friedman Peterson can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Friedman Peterson has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Friedman Peterson 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.
Stagnating economy with rate increase
– Friedman Peterson 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Peterson Industries: Louis Friedman, Friedman Peterson 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 .
High dependence on third party suppliers
– Friedman Peterson 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Friedman Peterson with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Friedman Peterson 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Friedman Peterson 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 Peterson Industries: Louis Friedman .
Environmental challenges
– Friedman Peterson 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. Friedman Peterson can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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 Friedman Peterson business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Friedman Peterson
– 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 Friedman Peterson.
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. Friedman Peterson 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.
Weighted SWOT Analysis of Peterson Industries: Louis Friedman 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 Peterson Industries: Louis Friedman 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 Peterson Industries: Louis Friedman 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 Peterson Industries: Louis Friedman 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 Peterson Industries: Louis Friedman 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 Friedman Peterson needs to make to build a sustainable competitive advantage.
