Case Study Description of El Sistema: Vision, Process, Impact
This case study describes the journey of "El Sistema", a classical music education programme in Venezuela that illustrates the transformative power of music to improve the lives of millions of youths in some of the poorest communities in the world. Using the experience and insights of founder JosA? Antonio Abreu, together with an analysis of the programme's development, the case shows how vision and inspiration are translated into a vibrant and effective organization in the long term. It covers the strategic initiatives and organizational processes used to engage and mobilize a critical mass of people to achieve large-scale impact throughout Venzuela and beyond.
Authors :: Ian C. Woodward, Pisitta Vongswasdi, Alexia Laramaud
Swot Analysis of "El Sistema: Vision, Process, Impact" written by Ian C. Woodward, Pisitta Vongswasdi, Alexia Laramaud includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sistema El facing as an external strategic factors. Some of the topics covered in El Sistema: Vision, Process, Impact case study are - Strategic Management Strategies, Leadership, Organizational structure, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the El Sistema: Vision, Process, Impact casestudy better are - – increasing government debt because of Covid-19 spendings, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, wage bills are increasing, challanges to central banks by blockchain based private currencies, technology disruption,
increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of El Sistema: Vision, Process, Impact
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in El Sistema: Vision, Process, Impact case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sistema El, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sistema El 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 El Sistema: Vision, Process, Impact can be done for the following purposes –
1. Strategic planning using facts provided in El Sistema: Vision, Process, Impact case study
2. Improving business portfolio management of Sistema El
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 Sistema El
Strengths El Sistema: Vision, Process, Impact | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sistema El in El Sistema: Vision, Process, Impact Harvard Business Review case study are -
Effective Research and Development (R&D)
– Sistema El has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study El Sistema: Vision, Process, Impact - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Sistema El is present in almost all the verticals within the industry. This has provided firm in El Sistema: Vision, Process, Impact 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 brand equity
– Sistema El has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sistema El to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Sistema El is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Sistema El is one of the leading recruiters in the industry. Managers in the El Sistema: Vision, Process, Impact are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Sistema El in the sector have low bargaining power. El Sistema: Vision, Process, Impact has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sistema El to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Sistema El digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sistema El 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.
Training and development
– Sistema El has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in El Sistema: Vision, Process, Impact 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.
Operational resilience
– The operational resilience strategy in the El Sistema: Vision, Process, Impact 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.
Learning organization
- Sistema El 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 Sistema El is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in El Sistema: Vision, Process, Impact Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Sistema El 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 Ian C. Woodward, Pisitta Vongswasdi, Alexia Laramaud 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.
Sustainable margins compare to other players in Strategy & Execution industry
– El Sistema: Vision, Process, Impact firm has clearly differentiated products in the market place. This has enabled Sistema El to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Sistema El to invest into research and development (R&D) and innovation.
Weaknesses El Sistema: Vision, Process, Impact | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of El Sistema: Vision, Process, Impact are -
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 Sistema El supply chain. Even after few cautionary changes mentioned in the HBR case study - El Sistema: Vision, Process, Impact, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sistema El vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Sistema El 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 cash cycle compare to competitors
Sistema El 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.
High operating costs
– Compare to the competitors, firm in the HBR case study El Sistema: Vision, Process, Impact 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 Sistema El 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the El Sistema: Vision, Process, Impact 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 Sistema El has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sistema El is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study El Sistema: Vision, Process, Impact 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, Sistema El 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 El Sistema: Vision, Process, Impact HBR case study mentions - Sistema El 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.
Aligning sales with marketing
– It come across in the case study El Sistema: Vision, Process, Impact 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 El Sistema: Vision, Process, Impact can leverage the sales team experience to cultivate customer relationships as Sistema El is planning to shift buying processes online.
Lack of clear differentiation of Sistema El products
– To increase the profitability and margins on the products, Sistema El needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Sistema El 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.
Opportunities El Sistema: Vision, Process, Impact | 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 El Sistema: Vision, Process, Impact are -
Creating value in data economy
– The success of analytics program of Sistema El has opened avenues for new revenue streams for the organization in the industry. This can help Sistema El to build a more holistic ecosystem as suggested in the El Sistema: Vision, Process, Impact case study. Sistema El 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
– Sistema El 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 El Sistema: Vision, Process, Impact - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sistema El to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Sistema El can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Sistema El 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. Sistema El 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.
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 Sistema El 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sistema El can use these opportunities to build new business models that can help the communities that Sistema El operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Sistema El 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.
Learning at scale
– Online learning technologies has now opened space for Sistema El 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.
Manufacturing automation
– Sistema El 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.
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. Sistema El can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Sistema El in the consumer business. Now Sistema El can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sistema El 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.
Developing new processes and practices
– Sistema El 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.
Threats El Sistema: Vision, Process, Impact External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study El Sistema: Vision, Process, Impact are -
Technology acceleration in Forth Industrial Revolution
– Sistema El has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Sistema El 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 Sistema El business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Sistema El is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Sistema El 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 Sistema El with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Sistema El 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sistema El 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.
Environmental challenges
– Sistema El 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. Sistema El can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Sistema El 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. Sistema El needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Sistema El 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sistema El 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 El Sistema: Vision, Process, Impact .
Increasing wage structure of Sistema El
– 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 Sistema El.
Weighted SWOT Analysis of El Sistema: Vision, Process, Impact 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 El Sistema: Vision, Process, Impact 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 El Sistema: Vision, Process, Impact 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 El Sistema: Vision, Process, Impact 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 El Sistema: Vision, Process, Impact 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 Sistema El needs to make to build a sustainable competitive advantage.