Swot Analysis of "ABB Flexible Automation (B): Global Strategy for the Millennium" written by Martha Lanning, Jean-Pierre Jeannet includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abb Millennium facing as an external strategic factors. Some of the topics covered in ABB Flexible Automation (B): Global Strategy for the Millennium case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the ABB Flexible Automation (B): Global Strategy for the Millennium casestudy better are - – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, geopolitical disruptions,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of ABB Flexible Automation (B): Global Strategy for the Millennium
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ABB Flexible Automation (B): Global Strategy for the Millennium case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abb Millennium, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abb Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium can be done for the following purposes –
1. Strategic planning using facts provided in ABB Flexible Automation (B): Global Strategy for the Millennium case study
2. Improving business portfolio management of Abb Millennium
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 Abb Millennium
Strengths ABB Flexible Automation (B): Global Strategy for the Millennium | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abb Millennium in ABB Flexible Automation (B): Global Strategy for the Millennium Harvard Business Review case study are -
Innovation driven organization
– Abb Millennium is one of the most innovative firm in sector. Manager in ABB Flexible Automation (B): Global Strategy for the Millennium 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
– Abb Millennium has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Abb Millennium to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Abb Millennium is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Abb Millennium
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Abb Millennium does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Abb Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Abb Millennium 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 Martha Lanning, Jean-Pierre Jeannet 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
– Abb Millennium is one of the leading recruiters in the industry. Managers in the ABB Flexible Automation (B): Global Strategy for the Millennium are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Abb Millennium 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.
Sustainable margins compare to other players in Strategy & Execution industry
– ABB Flexible Automation (B): Global Strategy for the Millennium firm has clearly differentiated products in the market place. This has enabled Abb Millennium to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Abb Millennium to invest into research and development (R&D) and innovation.
Training and development
– Abb Millennium has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ABB Flexible Automation (B): Global Strategy for the Millennium 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.
Successful track record of launching new products
– Abb Millennium has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abb Millennium 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 lead change in Strategy & Execution field
– Abb Millennium 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 Abb Millennium in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses ABB Flexible Automation (B): Global Strategy for the Millennium | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ABB Flexible Automation (B): Global Strategy for the Millennium are -
Interest costs
– Compare to the competition, Abb Millennium 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.
Products dominated business model
– Even though Abb Millennium 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 - ABB Flexible Automation (B): Global Strategy for the Millennium should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Abb Millennium 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.
Low market penetration in new markets
– Outside its home market of Abb Millennium, firm in the HBR case study ABB Flexible Automation (B): Global Strategy for the Millennium needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Abb Millennium 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ABB Flexible Automation (B): Global Strategy for the Millennium, in the dynamic environment Abb Millennium has struggled to respond to the nimble upstart competition. Abb Millennium has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study ABB Flexible Automation (B): Global Strategy for the Millennium 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 Abb Millennium 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Abb Millennium is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ABB Flexible Automation (B): Global Strategy for the Millennium can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ABB Flexible Automation (B): Global Strategy for the Millennium, it seems that the employees of Abb Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium can leverage the sales team experience to cultivate customer relationships as Abb Millennium is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Abb Millennium 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.
Opportunities ABB Flexible Automation (B): Global Strategy for the Millennium | 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 ABB Flexible Automation (B): Global Strategy for the Millennium are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Abb Millennium is facing challenges because of the dominance of functional experts in the organization. ABB Flexible Automation (B): Global Strategy for the Millennium 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.
Better consumer reach
– The expansion of the 5G network will help Abb Millennium to increase its market reach. Abb Millennium 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.
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. Abb Millennium 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. Abb Millennium 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Abb Millennium 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Abb Millennium 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 Abb Millennium to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Abb Millennium 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.
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. Abb Millennium can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Abb Millennium 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Abb Millennium can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Abb Millennium 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.
Building a culture of innovation
– managers at Abb Millennium 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Abb Millennium 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, ABB Flexible Automation (B): Global Strategy for the Millennium, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Abb Millennium can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ABB Flexible Automation (B): Global Strategy for the Millennium are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Abb Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ABB Flexible Automation (B): Global Strategy for the Millennium, Abb Millennium may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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 Abb Millennium in the Strategy & Execution sector and impact the bottomline of the organization.
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. Abb Millennium can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Abb Millennium
– 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 Abb Millennium.
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 Abb Millennium business can come under increasing regulations regarding data privacy, data security, etc.
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. Abb Millennium needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Abb Millennium with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Abb Millennium 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.
Shortening product life cycle
– it is one of the major threat that Abb Millennium is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Abb Millennium 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.
Environmental challenges
– Abb Millennium 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. Abb Millennium can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium 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 ABB Flexible Automation (B): Global Strategy for the Millennium 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 Abb Millennium needs to make to build a sustainable competitive advantage.