Case Study Description of Strategy Execution Module 6: Evaluating Strategic Profit Performance
This module reading demonstrates how to calculate and analyze the profit generated by different business strategies. Formulas and examples are provided to calculate profit generated by changes in market share, revenue growth, efficiency improvements, and support costs. The discussion illustrates how managers can use this information to unlock insights about competitive effectiveness and operating efficiencies, test their profit plan assumptions, and validate their business strategy. The module also discusses how strategic profitability analysis can be used for early warning and corrective action, performance evaluation, and strategic learning. With this information in hand, managers can redesign organizational processes or adjust the business strategy to take advantage of changes in competitive markets. While this module is designed to be used alone, it is part of the Strategy Execution series. Taken together, the series forms a complete course that teaches the latest techniques for using performance measurement and control systems to implement strategy. Modules 1 - 4 set out the foundations for strategy implementation. Modules 5 - 10 teach quantitative tools for performance measurement and control. Modules 11 - 15 illustrate the use of these techniques by managers to achieve profit goals and strategies. View the full Strategy Execution series at: hbsp.harvard.edu/strategyexecution.
Swot Analysis of "Strategy Execution Module 6: Evaluating Strategic Profit Performance" written by Robert L. Simons includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Module Modules facing as an external strategic factors. Some of the topics covered in Strategy Execution Module 6: Evaluating Strategic Profit Performance case study are - Strategic Management Strategies, Assessing performance, Corporate governance, Costs, Financial analysis, Performance measurement, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Strategy Execution Module 6: Evaluating Strategic Profit Performance casestudy better are - – challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, technology disruption,
increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Strategy Execution Module 6: Evaluating Strategic Profit Performance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategy Execution Module 6: Evaluating Strategic Profit Performance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Module Modules, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Module Modules 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 Strategy Execution Module 6: Evaluating Strategic Profit Performance can be done for the following purposes –
1. Strategic planning using facts provided in Strategy Execution Module 6: Evaluating Strategic Profit Performance case study
2. Improving business portfolio management of Module Modules
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 Module Modules
Strengths Strategy Execution Module 6: Evaluating Strategic Profit Performance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Module Modules in Strategy Execution Module 6: Evaluating Strategic Profit Performance Harvard Business Review case study are -
Strong track record of project management
– Module Modules is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Module Modules 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 Robert L. Simons 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.
Ability to recruit top talent
– Module Modules is one of the leading recruiters in the industry. Managers in the Strategy Execution Module 6: Evaluating Strategic Profit Performance are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Module Modules 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.
High switching costs
– The high switching costs that Module Modules 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.
Successful track record of launching new products
– Module Modules has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Module Modules 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.
Training and development
– Module Modules has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategy Execution Module 6: Evaluating Strategic Profit Performance 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.
Low bargaining power of suppliers
– Suppliers of Module Modules in the sector have low bargaining power. Strategy Execution Module 6: Evaluating Strategic Profit Performance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Module Modules to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Module Modules in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Module Modules
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Module Modules does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Strategy Execution Module 6: Evaluating Strategic Profit Performance 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.
Highly skilled collaborators
– Module Modules 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 Strategy Execution Module 6: Evaluating Strategic Profit Performance HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Strategy Execution Module 6: Evaluating Strategic Profit Performance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategy Execution Module 6: Evaluating Strategic Profit Performance are -
Need for greater diversity
– Module Modules 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.
Capital Spending Reduction
– Even during the low interest decade, Module Modules 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.
Skills based hiring
– The stress on hiring functional specialists at Module Modules 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.
Slow to strategic competitive environment developments
– As Strategy Execution Module 6: Evaluating Strategic Profit Performance HBR case study mentions - Module Modules 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 star products
– The top 2 products and services of the firm as mentioned in the Strategy Execution Module 6: Evaluating Strategic Profit Performance 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 Module Modules has relatively successful track record of launching new products.
Products dominated business model
– Even though Module Modules has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Strategy Execution Module 6: Evaluating Strategic Profit Performance should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Strategy Execution Module 6: Evaluating Strategic Profit Performance, 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, Module Modules is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Strategy Execution Module 6: Evaluating Strategic Profit Performance can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Strategy Execution Module 6: Evaluating Strategic Profit Performance 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 Module Modules 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Module Modules is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Module Modules needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Module Modules to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Module Modules, firm in the HBR case study Strategy Execution Module 6: Evaluating Strategic Profit Performance needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Strategy Execution Module 6: Evaluating Strategic Profit Performance | 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 Strategy Execution Module 6: Evaluating Strategic Profit Performance are -
Loyalty marketing
– Module Modules 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.
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. Module Modules can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Module Modules has opened avenues for new revenue streams for the organization in the industry. This can help Module Modules to build a more holistic ecosystem as suggested in the Strategy Execution Module 6: Evaluating Strategic Profit Performance case study. Module Modules can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Module Modules can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Module Modules 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.
Developing new processes and practices
– Module Modules 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Module Modules can use these opportunities to build new business models that can help the communities that Module Modules operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Module Modules 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 Module Modules in the consumer business. Now Module Modules 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, Module Modules 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.
Building a culture of innovation
– managers at Module Modules 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.
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 Module Modules 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.
Buying journey improvements
– Module Modules can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategy Execution Module 6: Evaluating Strategic Profit Performance 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.
Threats Strategy Execution Module 6: Evaluating Strategic Profit Performance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategy Execution Module 6: Evaluating Strategic Profit Performance are -
Stagnating economy with rate increase
– Module Modules 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Module Modules with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Module Modules 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.
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. Module Modules can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Module Modules 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.
Increasing wage structure of Module Modules
– 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 Module Modules.
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 Module Modules.
Environmental challenges
– Module Modules 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. Module Modules can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Module Modules is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Module Modules 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Module Modules business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Strategy Execution Module 6: Evaluating Strategic Profit Performance 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 Strategy Execution Module 6: Evaluating Strategic Profit Performance 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 Strategy Execution Module 6: Evaluating Strategic Profit Performance 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 Strategy Execution Module 6: Evaluating Strategic Profit Performance 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 Strategy Execution Module 6: Evaluating Strategic Profit Performance 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 Module Modules needs to make to build a sustainable competitive advantage.
