The Timken Company (A2): Selling to Peugeot SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Timken Company (A2): Selling to Peugeot
In 1995, at a turning point in the history of the bearings industry, the Timken Company acquires a high-volume bearings plant in Poland. Minor differences from Timken's traditional technology and products assume major importance as the acquisition is integrated, leading to fundamental shifts in the company's value proposition and organization.
Swot Analysis of "The Timken Company (A2): Selling to Peugeot" written by Yves L. Doz, Mark Hunter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Timken Bearings facing as an external strategic factors. Some of the topics covered in The Timken Company (A2): Selling to Peugeot case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Timken Company (A2): Selling to Peugeot casestudy better are - – cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , technology disruption, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, wage bills are increasing, etc
Introduction to SWOT Analysis of The Timken Company (A2): Selling to Peugeot
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Timken Company (A2): Selling to Peugeot case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Timken Bearings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Timken Bearings operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of The Timken Company (A2): Selling to Peugeot can be done for the following purposes –
1. Strategic planning using facts provided in The Timken Company (A2): Selling to Peugeot case study
2. Improving business portfolio management of Timken Bearings
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Timken Bearings
Strengths The Timken Company (A2): Selling to Peugeot | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Timken Bearings in The Timken Company (A2): Selling to Peugeot Harvard Business Review case study are -
High switching costs
– The high switching costs that Timken Bearings has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Timken Bearings has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Timken Company (A2): Selling to Peugeot Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the The Timken Company (A2): Selling to Peugeot 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.
Low bargaining power of suppliers
– Suppliers of Timken Bearings in the sector have low bargaining power. The Timken Company (A2): Selling to Peugeot has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Timken Bearings to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Timken Bearings in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Timken Bearings 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 Timken Bearings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Timken Company (A2): Selling to Peugeot Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Timken Bearings is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Yves L. Doz, Mark Hunter can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Timken Bearings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Timken Bearings has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Timken Bearings is one of the leading recruiters in the industry. Managers in the The Timken Company (A2): Selling to Peugeot are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Timken Bearings 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 The Timken Company (A2): Selling to Peugeot - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Timken Bearings has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Timken Bearings to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Timken Bearings is one of the most innovative firm in sector. Manager in The Timken Company (A2): Selling to Peugeot Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses The Timken Company (A2): Selling to Peugeot | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Timken Company (A2): Selling to Peugeot are -
High cash cycle compare to competitors
Timken Bearings has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Timken Bearings products
– To increase the profitability and margins on the products, Timken Bearings needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Yves L. Doz, Mark Hunter suggests that, Timken Bearings 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Timken Bearings supply chain. Even after few cautionary changes mentioned in the HBR case study - The Timken Company (A2): Selling to Peugeot, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Timken Bearings vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Timken Bearings is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Timken Bearings needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Timken Bearings to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Timken Company (A2): Selling to Peugeot 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 Timken Bearings has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Timken Bearings 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. Timken Bearings 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The Timken Company (A2): Selling to Peugeot has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Timken Bearings 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Timken Company (A2): Selling to Peugeot, in the dynamic environment Timken Bearings has struggled to respond to the nimble upstart competition. Timken Bearings has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study The Timken Company (A2): Selling to Peugeot, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Timken Bearings is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Timken Company (A2): Selling to Peugeot can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities The Timken Company (A2): Selling to Peugeot | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The Timken Company (A2): Selling to Peugeot are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Timken Bearings is facing challenges because of the dominance of functional experts in the organization. The Timken Company (A2): Selling to Peugeot case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Timken Bearings can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Timken Bearings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Timken Bearings to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. Timken Bearings 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. Timken Bearings 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 Timken Bearings has opened avenues for new revenue streams for the organization in the industry. This can help Timken Bearings to build a more holistic ecosystem as suggested in the The Timken Company (A2): Selling to Peugeot case study. Timken Bearings can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Timken Bearings in the consumer business. Now Timken Bearings can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Timken Bearings to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Loyalty marketing
– Timken Bearings has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Timken Bearings can use these opportunities to build new business models that can help the communities that Timken Bearings operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Timken Bearings in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Timken Bearings 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.
Manufacturing automation
– Timken Bearings can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats The Timken Company (A2): Selling to Peugeot External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Timken Company (A2): Selling to Peugeot are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Timken Bearings can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Timken Bearings needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Timken Bearings can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
Stagnating economy with rate increase
– Timken Bearings can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Timken Bearings in the Strategy & Execution sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Timken Bearings business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Timken Bearings is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Timken Bearings 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.
Regulatory challenges
– Timken Bearings needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Timken Bearings has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Timken Bearings 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 wage structure of Timken Bearings
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Timken Bearings.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Timken Bearings 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 The Timken Company (A2): Selling to Peugeot .
High dependence on third party suppliers
– Timken Bearings 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.
Weighted SWOT Analysis of The Timken Company (A2): Selling to Peugeot Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The Timken Company (A2): Selling to Peugeot needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The Timken Company (A2): Selling to Peugeot is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The Timken Company (A2): Selling to Peugeot is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The Timken Company (A2): Selling to Peugeot is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Timken Bearings needs to make to build a sustainable competitive advantage.