Case Study Description of Corporate Strategy at Berkshire Partners
The managing directors of Berkshire Partners, a mid-sized private equity firm, address strategic and organizational challenges in response to turbulent market conditions, rapid firm growth, and the transition of leadership from its founding partners to the next generations. To address some of these dynamics, and to protect Berkshire's corporate advantage, the managing directors established three executive oversight committees, developed new specialized corporate functions, and incubated an internal hedge fund group. Students are given the opportunity to assess Berkshire's recent changes in corporate strategy and organizational design and to formulate recommendations going forward.
Swot Analysis of "Corporate Strategy at Berkshire Partners" written by Julie M. Wulf, Scott Waggoner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Berkshire's Berkshire facing as an external strategic factors. Some of the topics covered in Corporate Strategy at Berkshire Partners case study are - Strategic Management Strategies, Entrepreneurial finance, Government, Leading teams, Organizational structure, Reorganization and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Corporate Strategy at Berkshire Partners casestudy better are - – increasing commodity prices, geopolitical disruptions, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, supply chains are disrupted by pandemic , increasing household debt because of falling income levels,
challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Corporate Strategy at Berkshire Partners
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Corporate Strategy at Berkshire Partners case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Berkshire's Berkshire, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Berkshire's Berkshire 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 Corporate Strategy at Berkshire Partners can be done for the following purposes –
1. Strategic planning using facts provided in Corporate Strategy at Berkshire Partners case study
2. Improving business portfolio management of Berkshire's Berkshire
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 Berkshire's Berkshire
Strengths Corporate Strategy at Berkshire Partners | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Berkshire's Berkshire in Corporate Strategy at Berkshire Partners Harvard Business Review case study are -
Highly skilled collaborators
– Berkshire's Berkshire 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 Corporate Strategy at Berkshire Partners HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Berkshire's Berkshire digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Berkshire's Berkshire 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.
High brand equity
– Berkshire's Berkshire has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Berkshire's Berkshire to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Berkshire's Berkshire
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Berkshire's Berkshire does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Berkshire's Berkshire is one of the most innovative firm in sector. Manager in Corporate Strategy at Berkshire Partners Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Berkshire's Berkshire has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Corporate Strategy at Berkshire Partners 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.
Diverse revenue streams
– Berkshire's Berkshire is present in almost all the verticals within the industry. This has provided firm in Corporate Strategy at Berkshire Partners 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.
Ability to lead change in Strategy & Execution field
– Berkshire's Berkshire is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Berkshire's Berkshire in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Berkshire's Berkshire 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 Berkshire's Berkshire is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Corporate Strategy at Berkshire Partners Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Berkshire's Berkshire 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 Julie M. Wulf, Scott Waggoner 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.
Operational resilience
– The operational resilience strategy in the Corporate Strategy at Berkshire Partners 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 Berkshire's Berkshire in the sector have low bargaining power. Corporate Strategy at Berkshire Partners has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Berkshire's Berkshire to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Corporate Strategy at Berkshire Partners | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Corporate Strategy at Berkshire Partners are -
Interest costs
– Compare to the competition, Berkshire's Berkshire 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Corporate Strategy at Berkshire Partners, it seems that the employees of Berkshire's Berkshire don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Corporate Strategy at Berkshire Partners 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 Corporate Strategy at Berkshire Partners can leverage the sales team experience to cultivate customer relationships as Berkshire's Berkshire is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Berkshire's Berkshire is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Berkshire's Berkshire needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Berkshire's Berkshire to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Berkshire's Berkshire 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 decision making process
– As mentioned earlier in the report, Berkshire's Berkshire 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. Berkshire's Berkshire 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Berkshire's Berkshire 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Berkshire's Berkshire is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Corporate Strategy at Berkshire Partners 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Corporate Strategy at Berkshire Partners 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 Berkshire's Berkshire has relatively successful track record of launching new products.
High cash cycle compare to competitors
Berkshire's Berkshire 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 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 Berkshire's Berkshire supply chain. Even after few cautionary changes mentioned in the HBR case study - Corporate Strategy at Berkshire Partners, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Berkshire's Berkshire vulnerable to further global disruptions in South East Asia.
Opportunities Corporate Strategy at Berkshire Partners | 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 Corporate Strategy at Berkshire Partners are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Berkshire's Berkshire is facing challenges because of the dominance of functional experts in the organization. Corporate Strategy at Berkshire Partners 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Berkshire's Berkshire can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Berkshire's Berkshire 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.
Creating value in data economy
– The success of analytics program of Berkshire's Berkshire has opened avenues for new revenue streams for the organization in the industry. This can help Berkshire's Berkshire to build a more holistic ecosystem as suggested in the Corporate Strategy at Berkshire Partners case study. Berkshire's Berkshire 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 Berkshire's Berkshire in the consumer business. Now Berkshire's Berkshire can target international markets with far fewer capital restrictions requirements than the existing system.
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. Berkshire's Berkshire can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Berkshire's Berkshire to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Berkshire's Berkshire to hire the very best people irrespective of their geographical location.
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. Berkshire's Berkshire 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. Berkshire's Berkshire 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Berkshire's Berkshire 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, Corporate Strategy at Berkshire Partners, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Berkshire's Berkshire 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Berkshire's Berkshire can use these opportunities to build new business models that can help the communities that Berkshire's Berkshire 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 Berkshire's Berkshire 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.
Using analytics as competitive advantage
– Berkshire's Berkshire 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 Corporate Strategy at Berkshire Partners - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Berkshire's Berkshire to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Corporate Strategy at Berkshire Partners External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Corporate Strategy at Berkshire Partners are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Berkshire's Berkshire 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.
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. Berkshire's Berkshire needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
Increasing wage structure of Berkshire's Berkshire
– 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 Berkshire's Berkshire.
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 Berkshire's Berkshire.
Regulatory challenges
– Berkshire's Berkshire 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.
High dependence on third party suppliers
– Berkshire's Berkshire 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.
Shortening product life cycle
– it is one of the major threat that Berkshire's Berkshire 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. Berkshire's Berkshire 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.
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. Berkshire's Berkshire can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Berkshire's Berkshire 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Berkshire's Berkshire with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Berkshire's Berkshire 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. Berkshire's Berkshire can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Corporate Strategy at Berkshire Partners 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 Corporate Strategy at Berkshire Partners 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 Corporate Strategy at Berkshire Partners 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 Corporate Strategy at Berkshire Partners 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 Corporate Strategy at Berkshire Partners 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 Berkshire's Berkshire needs to make to build a sustainable competitive advantage.