Case Study Description of Achieving Successful Strategic Transformation
This is an MIT Sloan Management Review article. Companies that are able to radically change their entrenched ways of doing things and then reclaim leading positions in their industries are the exception rather than the rule. Even less common are companies able to anticipate a new set of requirements and mobilize the internal and external resources necessary to meet them. Few companies make the transformation from their old model to a new one willingly. Typically, they begin to search for a new way forward only when they are pushed. This raises two important questions for corporate managers: (1) Is decline inevitable? (2) Do companies really need a financial downturn to galvanize change, or can they adopt new ways of doing things when not under pressure? Management theorists have observed that decline, while perhaps not inevitable, is at least very likely after a period of time. For this reason, the authors argue, it's important for organizations to develop new dynamic capabilities deliberately rather than relying entirely on their historic capabilities. In their attempt to understand what makes for successful organizational transformations, the authors studied 215 of the United Kingdom's largest public companies. The article focuses on three companies that transformed themselves-Cadbury Schweppes in packaged goods, Tesco in grocery retail and Smith & Nephew in medical devices. It compares them with three other companies from similar industries that were also successful but hadn't been required to make a dramatic shift. The authors found that the companies that transformed themselves had three fundamental advantages over their peers. First, they were able to build alternative coalitions with management. Second, they were able to create a tradition of constructively challenging business as usual. And third, they were able to exploit "happy accidents"to make strategic changes. Together these advantages helped them establish a virtuous cycle of strategic transformation.
Authors :: Gerry Johnson, George S. Yip, Manuel Hensmans
Swot Analysis of "Achieving Successful Strategic Transformation" written by Gerry Johnson, George S. Yip, Manuel Hensmans includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Companies Inevitable facing as an external strategic factors. Some of the topics covered in Achieving Successful Strategic Transformation case study are - Strategic Management Strategies, Operations management, Research & development and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Achieving Successful Strategic Transformation casestudy better are - – talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, technology disruption,
there is backlash against globalization, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Achieving Successful Strategic Transformation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Achieving Successful Strategic Transformation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Companies Inevitable, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Companies Inevitable 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 Achieving Successful Strategic Transformation can be done for the following purposes –
1. Strategic planning using facts provided in Achieving Successful Strategic Transformation case study
2. Improving business portfolio management of Companies Inevitable
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 Companies Inevitable
Strengths Achieving Successful Strategic Transformation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Companies Inevitable in Achieving Successful Strategic Transformation Harvard Business Review case study are -
Training and development
– Companies Inevitable has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Achieving Successful Strategic Transformation 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.
Ability to recruit top talent
– Companies Inevitable is one of the leading recruiters in the industry. Managers in the Achieving Successful Strategic Transformation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Companies Inevitable 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 Achieving Successful Strategic Transformation 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 Companies Inevitable digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Companies Inevitable 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.
Operational resilience
– The operational resilience strategy in the Achieving Successful Strategic Transformation 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.
Successful track record of launching new products
– Companies Inevitable has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Companies Inevitable 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.
Innovation driven organization
– Companies Inevitable is one of the most innovative firm in sector. Manager in Achieving Successful Strategic Transformation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Strategy & Execution field
– Companies Inevitable 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 Companies Inevitable in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– Achieving Successful Strategic Transformation firm has clearly differentiated products in the market place. This has enabled Companies Inevitable to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Companies Inevitable to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Companies Inevitable in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Companies Inevitable in the sector have low bargaining power. Achieving Successful Strategic Transformation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Companies Inevitable to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Companies Inevitable 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 Companies Inevitable is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Achieving Successful Strategic Transformation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Achieving Successful Strategic Transformation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Achieving Successful Strategic Transformation are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Achieving Successful Strategic Transformation, is just above the industry average. Companies Inevitable needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Achieving Successful Strategic Transformation 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 Companies Inevitable has relatively successful track record of launching new products.
Lack of clear differentiation of Companies Inevitable products
– To increase the profitability and margins on the products, Companies Inevitable needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Achieving Successful Strategic Transformation, it seems that the employees of Companies Inevitable 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gerry Johnson, George S. Yip, Manuel Hensmans suggests that, Companies Inevitable 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.
Increasing silos among functional specialists
– The organizational structure of Companies Inevitable is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Companies Inevitable needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Companies Inevitable to focus more on services rather than just following the product oriented approach.
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 Companies Inevitable supply chain. Even after few cautionary changes mentioned in the HBR case study - Achieving Successful Strategic Transformation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Companies Inevitable vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Companies Inevitable 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 - Achieving Successful Strategic Transformation should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Achieving Successful Strategic Transformation 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 Companies Inevitable 's lucrative customers.
Need for greater diversity
– Companies Inevitable 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.
Interest costs
– Compare to the competition, Companies Inevitable 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.
Opportunities Achieving Successful Strategic Transformation | 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 Achieving Successful Strategic Transformation are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Companies Inevitable 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 Companies Inevitable 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 Companies Inevitable 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Companies Inevitable 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.
Leveraging digital technologies
– Companies Inevitable 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.
Manufacturing automation
– Companies Inevitable 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.
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. Companies Inevitable can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Companies Inevitable can use these opportunities to build new business models that can help the communities that Companies Inevitable operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Companies Inevitable to increase its market reach. Companies Inevitable 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.
Creating value in data economy
– The success of analytics program of Companies Inevitable has opened avenues for new revenue streams for the organization in the industry. This can help Companies Inevitable to build a more holistic ecosystem as suggested in the Achieving Successful Strategic Transformation case study. Companies Inevitable can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Companies Inevitable 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.
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. Companies Inevitable 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. Companies Inevitable 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.
Developing new processes and practices
– Companies Inevitable 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.
Threats Achieving Successful Strategic Transformation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Achieving Successful Strategic Transformation are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Achieving Successful Strategic Transformation, Companies Inevitable 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 .
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.
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 Companies Inevitable business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Companies Inevitable 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. Companies Inevitable can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Companies Inevitable needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Companies Inevitable can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Companies Inevitable 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 Achieving Successful Strategic Transformation .
Regulatory challenges
– Companies Inevitable 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
– Companies Inevitable 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.
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 Companies Inevitable.
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 Companies Inevitable in the Strategy & Execution sector and impact the bottomline of the organization.
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. Companies Inevitable 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.
Weighted SWOT Analysis of Achieving Successful Strategic Transformation 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 Achieving Successful Strategic Transformation 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 Achieving Successful Strategic Transformation 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 Achieving Successful Strategic Transformation 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 Achieving Successful Strategic Transformation 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 Companies Inevitable needs to make to build a sustainable competitive advantage.