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 - – increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing transportation and logistics costs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, wage bills are increasing, 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 -
Effective Research and Development (R&D)
– Companies Inevitable 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 Achieving Successful Strategic Transformation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Companies Inevitable has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Companies Inevitable to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Companies Inevitable 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.
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.
Diverse revenue streams
– Companies Inevitable is present in almost all the verticals within the industry. This has provided firm in Achieving Successful Strategic Transformation 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 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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Companies Inevitable 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.
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.
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 -
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Achieving Successful Strategic Transformation, in the dynamic environment Companies Inevitable has struggled to respond to the nimble upstart competition. Companies Inevitable has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Companies Inevitable is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Achieving Successful Strategic Transformation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Achieving Successful Strategic Transformation, 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.
High cash cycle compare to competitors
Companies Inevitable 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.
Slow decision making process
– As mentioned earlier in the report, Companies Inevitable 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. Companies Inevitable 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.
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.
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.
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.
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.
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.
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 -
Learning at scale
– Online learning technologies has now opened space for Companies Inevitable 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.
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.
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.
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.
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.
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 Companies Inevitable in the consumer business. Now Companies Inevitable can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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. Companies Inevitable can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Buying journey improvements
– Companies Inevitable can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Achieving Successful Strategic Transformation 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.
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.
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 -
Shortening product life cycle
– it is one of the major threat that Companies Inevitable is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Companies Inevitable 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. Companies Inevitable needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Companies Inevitable with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Increasing wage structure of Companies Inevitable
– 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 Companies Inevitable.
Consumer confidence and its impact on Companies Inevitable 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.
Stagnating economy with rate increase
– Companies Inevitable 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.
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.
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.
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.
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.