Merloni Elettrodomestici: The New Century Begins SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Merloni Elettrodomestici: The New Century Begins
This case is accompanied by a Video Short that can be shown in class or included in a digital coursepack. Instructors should consider the timing of making the video available to students, as it may reveal key case details.Merloni Elettrodomestici was founded in 1975. This case traces the evolution of the company's strategy, organization, and management as it becomes the #3 player in Europe (the #1 in Eastern Europe). Issues involve questions of geographic expansion, resource allocation, and organization.
Swot Analysis of "Merloni Elettrodomestici: The New Century Begins" written by Joseph L. Bower includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Elettrodomestici Details.merloni facing as an external strategic factors. Some of the topics covered in Merloni Elettrodomestici: The New Century Begins case study are - Strategic Management Strategies, Leadership, Marketing, Operations management, Organizational structure, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Merloni Elettrodomestici: The New Century Begins casestudy better are - – increasing commodity prices, geopolitical disruptions, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing energy prices, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing transportation and logistics costs, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Merloni Elettrodomestici: The New Century Begins
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Merloni Elettrodomestici: The New Century Begins case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Elettrodomestici Details.merloni, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Elettrodomestici Details.merloni 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 Merloni Elettrodomestici: The New Century Begins can be done for the following purposes –
1. Strategic planning using facts provided in Merloni Elettrodomestici: The New Century Begins case study
2. Improving business portfolio management of Elettrodomestici Details.merloni
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 Elettrodomestici Details.merloni
Strengths Merloni Elettrodomestici: The New Century Begins | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Elettrodomestici Details.merloni in Merloni Elettrodomestici: The New Century Begins Harvard Business Review case study are -
Highly skilled collaborators
– Elettrodomestici Details.merloni 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 Merloni Elettrodomestici: The New Century Begins HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Elettrodomestici Details.merloni is one of the most innovative firm in sector. Manager in Merloni Elettrodomestici: The New Century Begins Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Strategy & Execution field
– Elettrodomestici Details.merloni is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Elettrodomestici Details.merloni in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Elettrodomestici Details.merloni is present in almost all the verticals within the industry. This has provided firm in Merloni Elettrodomestici: The New Century Begins 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.
High switching costs
– The high switching costs that Elettrodomestici Details.merloni 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Elettrodomestici Details.merloni digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Elettrodomestici Details.merloni has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Elettrodomestici Details.merloni in the sector have low bargaining power. Merloni Elettrodomestici: The New Century Begins has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Elettrodomestici Details.merloni to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Elettrodomestici Details.merloni has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Elettrodomestici Details.merloni 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
– Merloni Elettrodomestici: The New Century Begins firm has clearly differentiated products in the market place. This has enabled Elettrodomestici Details.merloni to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Elettrodomestici Details.merloni to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Elettrodomestici Details.merloni has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Elettrodomestici Details.merloni 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.
Superior customer experience
– The customer experience strategy of Elettrodomestici Details.merloni 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 Elettrodomestici Details.merloni 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.
Weaknesses Merloni Elettrodomestici: The New Century Begins | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merloni Elettrodomestici: The New Century Begins are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Merloni Elettrodomestici: The New Century Begins, it seems that the employees of Elettrodomestici Details.merloni 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Merloni Elettrodomestici: The New Century Begins 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 Elettrodomestici Details.merloni 's lucrative customers.
Interest costs
– Compare to the competition, Elettrodomestici Details.merloni 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Merloni Elettrodomestici: The New Century Begins, in the dynamic environment Elettrodomestici Details.merloni has struggled to respond to the nimble upstart competition. Elettrodomestici Details.merloni has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Elettrodomestici Details.merloni has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Elettrodomestici Details.merloni is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Merloni Elettrodomestici: The New Century Begins can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Elettrodomestici Details.merloni 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 strategic competitive environment developments
– As Merloni Elettrodomestici: The New Century Begins HBR case study mentions - Elettrodomestici Details.merloni 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 Elettrodomestici Details.merloni supply chain. Even after few cautionary changes mentioned in the HBR case study - Merloni Elettrodomestici: The New Century Begins, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Elettrodomestici Details.merloni vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Merloni Elettrodomestici: The New Century Begins HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Elettrodomestici Details.merloni has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Merloni Elettrodomestici: The New Century Begins, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Merloni Elettrodomestici: The New Century Begins | 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 Merloni Elettrodomestici: The New Century Begins are -
Learning at scale
– Online learning technologies has now opened space for Elettrodomestici Details.merloni 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.
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. Elettrodomestici Details.merloni can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Elettrodomestici Details.merloni to increase its market reach. Elettrodomestici Details.merloni 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.
Loyalty marketing
– Elettrodomestici Details.merloni 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 Elettrodomestici Details.merloni 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Elettrodomestici Details.merloni 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 Elettrodomestici Details.merloni to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Elettrodomestici Details.merloni 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Elettrodomestici Details.merloni 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.
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. Elettrodomestici Details.merloni 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. Elettrodomestici Details.merloni 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 Elettrodomestici Details.merloni has opened avenues for new revenue streams for the organization in the industry. This can help Elettrodomestici Details.merloni to build a more holistic ecosystem as suggested in the Merloni Elettrodomestici: The New Century Begins case study. Elettrodomestici Details.merloni can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Elettrodomestici Details.merloni 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, Merloni Elettrodomestici: The New Century Begins, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Elettrodomestici Details.merloni can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Elettrodomestici Details.merloni 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.
Threats Merloni Elettrodomestici: The New Century Begins External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Merloni Elettrodomestici: The New Century Begins are -
Stagnating economy with rate increase
– Elettrodomestici Details.merloni 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.
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. Elettrodomestici Details.merloni can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Elettrodomestici Details.merloni 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. Elettrodomestici Details.merloni can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Elettrodomestici Details.merloni
– 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 Elettrodomestici Details.merloni.
Technology acceleration in Forth Industrial Revolution
– Elettrodomestici Details.merloni has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Elettrodomestici Details.merloni needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Elettrodomestici Details.merloni 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 Merloni Elettrodomestici: The New Century Begins .
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.
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 Elettrodomestici Details.merloni in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Elettrodomestici Details.merloni 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.
Regulatory challenges
– Elettrodomestici Details.merloni 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Merloni Elettrodomestici: The New Century Begins, Elettrodomestici Details.merloni 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 .
Shortening product life cycle
– it is one of the major threat that Elettrodomestici Details.merloni is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Merloni Elettrodomestici: The New Century Begins 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 Merloni Elettrodomestici: The New Century Begins 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 Merloni Elettrodomestici: The New Century Begins 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 Merloni Elettrodomestici: The New Century Begins 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 Merloni Elettrodomestici: The New Century Begins 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 Elettrodomestici Details.merloni needs to make to build a sustainable competitive advantage.
