Olympic Group Acquisition of IDEAL SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Olympic Group Acquisition of IDEAL
Olympic Group (OG) was an Egyptian white goods giant that made products such as water heaters, fans, and cookers. In 1997, OG decided to buy IDEAL, a large state-owned white goods firm. Being a monopoly in its markets, IDEAL had a strong brand name and market share, which made it very attractive for OG. Also, the products that IDEAL produced - refrigerators and washing machines - complemented OG's products. A year after the acquisition, OG had to deal with several issues such as integrating the employees of the two companies, boosting employees' productivity, changing IDEAL's brand image, and improving IDEAL's products. Accordingly, within the next month, the CEO had to decide whether to start by changing IDEAL's brand image or integrating the employees of the two companies. He also had to consider how and when to integrate the employees of the two companies without affecting overall performance. What methods should he use to boost the employees' productivity, especially at IDEAL? What areas needed to be worked on in order to improve the IDEAL brand image without affecting its market share? What changes in IDEAL's products were required to sustain its competitiveness and market share?
Swot Analysis of "Olympic Group Acquisition of IDEAL" written by Marina Apaydin, Hend Mostafa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ideal's Og facing as an external strategic factors. Some of the topics covered in Olympic Group Acquisition of IDEAL case study are - Strategic Management Strategies, Marketing, Organizational culture, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Olympic Group Acquisition of IDEAL casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, challanges to central banks by blockchain based private currencies, technology disruption, there is increasing trade war between United States & China, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Olympic Group Acquisition of IDEAL
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Olympic Group Acquisition of IDEAL case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ideal's Og, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ideal's Og 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 Olympic Group Acquisition of IDEAL can be done for the following purposes –
1. Strategic planning using facts provided in Olympic Group Acquisition of IDEAL case study
2. Improving business portfolio management of Ideal's Og
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 Ideal's Og
Strengths Olympic Group Acquisition of IDEAL | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ideal's Og in Olympic Group Acquisition of IDEAL Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Olympic Group Acquisition of IDEAL 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
– Ideal's Og has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ideal's Og 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.
Superior customer experience
– The customer experience strategy of Ideal's Og in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Ideal's Og is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Ideal's Og is present in almost all the verticals within the industry. This has provided firm in Olympic Group Acquisition of IDEAL 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.
High switching costs
– The high switching costs that Ideal's Og 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ideal's Og digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ideal's Og 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.
Highly skilled collaborators
– Ideal's Og 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 Olympic Group Acquisition of IDEAL HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Ideal's Og 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 Ideal's Og is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Olympic Group Acquisition of IDEAL Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Ideal's Og 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 Olympic Group Acquisition of IDEAL - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Ideal's Og in the sector have low bargaining power. Olympic Group Acquisition of IDEAL has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ideal's Og to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Ideal's Og has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ideal's Og to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Olympic Group Acquisition of IDEAL | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Olympic Group Acquisition of IDEAL are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ideal's Og is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Olympic Group Acquisition of IDEAL can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Ideal's Og 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Olympic Group Acquisition of IDEAL, is just above the industry average. Ideal's Og 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Olympic Group Acquisition of IDEAL, it seems that the employees of Ideal's Og 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.
No frontier risks strategy
– After analyzing the HBR case study Olympic Group Acquisition of IDEAL, 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.
Need for greater diversity
– Ideal's Og 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.
Aligning sales with marketing
– It come across in the case study Olympic Group Acquisition of IDEAL 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 Olympic Group Acquisition of IDEAL can leverage the sales team experience to cultivate customer relationships as Ideal's Og is planning to shift buying processes online.
High cash cycle compare to competitors
Ideal's Og 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 star products
– The top 2 products and services of the firm as mentioned in the Olympic Group Acquisition of IDEAL 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 Ideal's Og has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Ideal's Og 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. Ideal's Og 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Olympic Group Acquisition of IDEAL 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 Ideal's Og 's lucrative customers.
Opportunities Olympic Group Acquisition of IDEAL | 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 Olympic Group Acquisition of IDEAL are -
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 Ideal's Og in the consumer business. Now Ideal's Og can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Ideal's Og 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ideal's Og 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 Ideal's Og to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ideal's Og 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, Olympic Group Acquisition of IDEAL, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Ideal's Og can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ideal's Og is facing challenges because of the dominance of functional experts in the organization. Olympic Group Acquisition of IDEAL 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.
Building a culture of innovation
– managers at Ideal's Og 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.
Better consumer reach
– The expansion of the 5G network will help Ideal's Og to increase its market reach. Ideal's Og 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.
Leveraging digital technologies
– Ideal's Og 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.
Using analytics as competitive advantage
– Ideal's Og 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 Olympic Group Acquisition of IDEAL - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ideal's Og to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ideal's Og 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.
Creating value in data economy
– The success of analytics program of Ideal's Og has opened avenues for new revenue streams for the organization in the industry. This can help Ideal's Og to build a more holistic ecosystem as suggested in the Olympic Group Acquisition of IDEAL case study. Ideal's Og can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ideal's Og can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Olympic Group Acquisition of IDEAL External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Olympic Group Acquisition of IDEAL are -
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. Ideal's Og needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Ideal's Og 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.
Consumer confidence and its impact on Ideal's Og 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.
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 Ideal's Og.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ideal's Og with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Ideal's Og 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. Ideal's Og can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Ideal's Og 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.
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. Ideal's Og 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. Ideal's Og can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Ideal's Og 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, Ideal's Og 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 Olympic Group Acquisition of IDEAL .
Technology acceleration in Forth Industrial Revolution
– Ideal's Og has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ideal's Og needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Olympic Group Acquisition of IDEAL, Ideal's Og 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 .
Weighted SWOT Analysis of Olympic Group Acquisition of IDEAL 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 Olympic Group Acquisition of IDEAL 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 Olympic Group Acquisition of IDEAL 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 Olympic Group Acquisition of IDEAL 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 Olympic Group Acquisition of IDEAL 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 Ideal's Og needs to make to build a sustainable competitive advantage.