Leica Camera: A "Boutique" Firm Faces a World of Change SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Leica Camera: A "Boutique" Firm Faces a World of Change
This note is used in the course elective, Strategic Post-Merger Integration. This case is taught in Darden's Global EMBA Strategy course. Well suited for MBA, Executive MBA, GEMBA, and executive education programs, this case describes the circumstances at Leica Camera, the famed German manufacturer of high-end cameras, and allows for an analysis of the firm's competitive position. Although the company decides to stop production of its R-system camera and lenses, a backlash from users surfaces. That leaves the case open to exploring the uncertainty over achievable sales volume for the R-series lenses as well as where the company fits in the market as new and less-expensive competitor products gain popularity. The case provides an overview of the competitive style of major camera and lens manufacturers and allows a discussion of core capabilities of these competitors. What products would secure Leica's future? Was there development potential for a new universal system? The case describes an issue that many organizations face today-how to decide whether components are strategically critical.
Authors :: Bill Chapman, Gerry Yemen, S. Venkataraman
Swot Analysis of "Leica Camera: A "Boutique" Firm Faces a World of Change" written by Bill Chapman, Gerry Yemen, S. Venkataraman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Camera Leica facing as an external strategic factors. Some of the topics covered in Leica Camera: A "Boutique" Firm Faces a World of Change case study are - Strategic Management Strategies, Competition, Decision making, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Leica Camera: A "Boutique" Firm Faces a World of Change casestudy better are - – wage bills are increasing, challanges to central banks by blockchain based private currencies, technology disruption, there is backlash against globalization, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Leica Camera: A "Boutique" Firm Faces a World of Change
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Leica Camera: A "Boutique" Firm Faces a World of Change case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Camera Leica, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Camera Leica 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 Leica Camera: A "Boutique" Firm Faces a World of Change can be done for the following purposes –
1. Strategic planning using facts provided in Leica Camera: A "Boutique" Firm Faces a World of Change case study
2. Improving business portfolio management of Camera Leica
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 Camera Leica
Strengths Leica Camera: A "Boutique" Firm Faces a World of Change | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Camera Leica in Leica Camera: A "Boutique" Firm Faces a World of Change Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Camera Leica in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Camera Leica 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 Bill Chapman, Gerry Yemen, S. Venkataraman 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.
High switching costs
– The high switching costs that Camera Leica 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.
Strong track record of project management
– Camera Leica is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Leica Camera: A "Boutique" Firm Faces a World of Change 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
- Camera Leica 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 Camera Leica is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Leica Camera: A "Boutique" Firm Faces a World of Change Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Camera Leica digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Camera Leica 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.
Organizational Resilience of Camera Leica
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Camera Leica does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Camera Leica is one of the most innovative firm in sector. Manager in Leica Camera: A "Boutique" Firm Faces a World of Change Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Camera Leica has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Camera Leica to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Camera Leica is one of the leading recruiters in the industry. Managers in the Leica Camera: A "Boutique" Firm Faces a World of Change are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– Leica Camera: A "Boutique" Firm Faces a World of Change firm has clearly differentiated products in the market place. This has enabled Camera Leica to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Camera Leica to invest into research and development (R&D) and innovation.
Weaknesses Leica Camera: A "Boutique" Firm Faces a World of Change | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Leica Camera: A "Boutique" Firm Faces a World of Change are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Leica Camera: A "Boutique" Firm Faces a World of Change, is just above the industry average. Camera Leica 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.
Increasing silos among functional specialists
– The organizational structure of Camera Leica is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Camera Leica needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Camera Leica to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change can leverage the sales team experience to cultivate customer relationships as Camera Leica is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Camera Leica is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Leica Camera: A "Boutique" Firm Faces a World of Change can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Camera Leica 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Leica Camera: A "Boutique" Firm Faces a World of Change 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 Camera Leica has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Camera Leica 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.
Slow to strategic competitive environment developments
– As Leica Camera: A "Boutique" Firm Faces a World of Change HBR case study mentions - Camera Leica 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.
Slow decision making process
– As mentioned earlier in the report, Camera Leica has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Camera Leica even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Camera Leica 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Bill Chapman, Gerry Yemen, S. Venkataraman suggests that, Camera Leica 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.
Opportunities Leica Camera: A "Boutique" Firm Faces a World of Change | 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 Leica Camera: A "Boutique" Firm Faces a World of Change are -
Better consumer reach
– The expansion of the 5G network will help Camera Leica to increase its market reach. Camera Leica 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.
Leveraging digital technologies
– Camera Leica 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.
Loyalty marketing
– Camera Leica 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Camera Leica 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, Leica Camera: A "Boutique" Firm Faces a World of Change, 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, Camera Leica 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
– Camera Leica 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.
Building a culture of innovation
– managers at Camera Leica 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Camera Leica 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Camera Leica can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Camera Leica can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Leica Camera: A "Boutique" Firm Faces a World of Change 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.
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 Camera Leica in the consumer business. Now Camera Leica can target international markets with far fewer capital restrictions requirements than the existing system.
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. Camera Leica can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Camera Leica has opened avenues for new revenue streams for the organization in the industry. This can help Camera Leica to build a more holistic ecosystem as suggested in the Leica Camera: A "Boutique" Firm Faces a World of Change case study. Camera Leica can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Leica Camera: A "Boutique" Firm Faces a World of Change External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Leica Camera: A "Boutique" Firm Faces a World of Change are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Camera Leica with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Camera Leica has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Camera Leica 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.
Regulatory challenges
– Camera Leica 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.
Shortening product life cycle
– it is one of the major threat that Camera Leica is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Camera Leica
– 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 Camera Leica.
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. Camera Leica can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Camera Leica 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.
Stagnating economy with rate increase
– Camera Leica 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.
Consumer confidence and its impact on Camera Leica demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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 Camera Leica in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Camera Leica 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.
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 Camera Leica.
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.
Weighted SWOT Analysis of Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change 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 Camera Leica needs to make to build a sustainable competitive advantage.