Leica Camera: A "Boutique" Firm Faces a World of Change SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Leica Camera: A "Boutique" Firm Faces a World of Change
This note is used in the course elective, Strategic Post-Merger Integration. This case is taught in Darden's Global EMBA Strategy course. Well suited for MBA, Executive MBA, GEMBA, and executive education programs, this case describes the circumstances at Leica Camera, the famed German manufacturer of high-end cameras, and allows for an analysis of the firm's competitive position. Although the company decides to stop production of its R-system camera and lenses, a backlash from users surfaces. That leaves the case open to exploring the uncertainty over achievable sales volume for the R-series lenses as well as where the company fits in the market as new and less-expensive competitor products gain popularity. The case provides an overview of the competitive style of major camera and lens manufacturers and allows a discussion of core capabilities of these competitors. What products would secure Leica's future? Was there development potential for a new universal system? The case describes an issue that many organizations face today-how to decide whether components are strategically critical.
Authors :: Bill Chapman, Gerry Yemen, S. Venkataraman
Swot Analysis of "Leica Camera: A "Boutique" Firm Faces a World of Change" written by Bill Chapman, Gerry Yemen, S. Venkataraman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Camera Leica facing as an external strategic factors. Some of the topics covered in Leica Camera: A "Boutique" Firm Faces a World of Change case study are - Strategic Management Strategies, Competition, Decision making, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Leica Camera: A "Boutique" Firm Faces a World of Change casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
central banks are concerned over increasing inflation, increasing commodity prices, etc
Introduction to SWOT Analysis of Leica Camera: A "Boutique" Firm Faces a World of Change
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Leica Camera: A "Boutique" Firm Faces a World of Change case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Camera Leica, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Camera Leica 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 Leica Camera: A "Boutique" Firm Faces a World of Change can be done for the following purposes –
1. Strategic planning using facts provided in Leica Camera: A "Boutique" Firm Faces a World of Change case study
2. Improving business portfolio management of Camera Leica
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 Camera Leica
Strengths Leica Camera: A "Boutique" Firm Faces a World of Change | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Camera Leica in Leica Camera: A "Boutique" Firm Faces a World of Change Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Leica Camera: A "Boutique" Firm Faces a World of Change firm has clearly differentiated products in the market place. This has enabled Camera Leica to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Camera Leica to invest into research and development (R&D) and innovation.
Learning organization
- Camera Leica 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 Camera Leica is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Leica Camera: A "Boutique" Firm Faces a World of Change Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Camera Leica has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Leica Camera: A "Boutique" Firm Faces a World of Change 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 brand equity
– Camera Leica has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Camera Leica to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Camera Leica 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 Bill Chapman, Gerry Yemen, S. Venkataraman 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.
Highly skilled collaborators
– Camera Leica 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 Leica Camera: A "Boutique" Firm Faces a World of Change HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Camera Leica
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Camera Leica does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Camera Leica 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 recruit top talent
– Camera Leica is one of the leading recruiters in the industry. Managers in the Leica Camera: A "Boutique" Firm Faces a World of Change are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Camera Leica is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Camera Leica is one of the most innovative firm in sector. Manager in Leica Camera: A "Boutique" Firm Faces a World of Change Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Camera Leica in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Leica Camera: A "Boutique" Firm Faces a World of Change | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Leica Camera: A "Boutique" Firm Faces a World of Change are -
Slow decision making process
– As mentioned earlier in the report, Camera Leica 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. Camera Leica 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.
Need for greater diversity
– Camera Leica 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.
No frontier risks strategy
– After analyzing the HBR case study Leica Camera: A "Boutique" Firm Faces a World of Change, 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.
Interest costs
– Compare to the competition, Camera Leica 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.
Low market penetration in new markets
– Outside its home market of Camera Leica, firm in the HBR case study Leica Camera: A "Boutique" Firm Faces a World of Change needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Leica Camera: A "Boutique" Firm Faces a World of Change, is just above the industry average. Camera Leica 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.
Products dominated business model
– Even though Camera Leica 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 - Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change 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 Camera Leica 's lucrative customers.
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 Camera Leica supply chain. Even after few cautionary changes mentioned in the HBR case study - Leica Camera: A "Boutique" Firm Faces a World of Change, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Camera Leica vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Camera Leica 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.
Increasing silos among functional specialists
– The organizational structure of Camera Leica is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Camera Leica needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Camera Leica to focus more on services rather than just following the product oriented approach.
Opportunities Leica Camera: A "Boutique" Firm Faces a World of Change | 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 Leica Camera: A "Boutique" Firm Faces a World of Change are -
Using analytics as competitive advantage
– Camera Leica 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 Leica Camera: A "Boutique" Firm Faces a World of Change - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Camera Leica to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Camera Leica 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Camera Leica can use these opportunities to build new business models that can help the communities that Camera Leica operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Camera Leica 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 Camera Leica 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 Camera Leica to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Camera Leica to increase its market reach. Camera Leica 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.
Manufacturing automation
– Camera Leica 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.
Buying journey improvements
– Camera Leica can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Leica Camera: A "Boutique" Firm Faces a World of Change 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.
Creating value in data economy
– The success of analytics program of Camera Leica has opened avenues for new revenue streams for the organization in the industry. This can help Camera Leica to build a more holistic ecosystem as suggested in the Leica Camera: A "Boutique" Firm Faces a World of Change case study. Camera Leica can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Camera Leica in the consumer business. Now Camera Leica can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Camera Leica 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.
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. Camera Leica can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Camera Leica is facing challenges because of the dominance of functional experts in the organization. Leica Camera: A "Boutique" Firm Faces a World of Change 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.
Threats Leica Camera: A "Boutique" Firm Faces a World of Change External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Leica Camera: A "Boutique" Firm Faces a World of Change are -
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. Camera Leica can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Camera Leica needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Camera Leica 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Camera Leica 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 Leica Camera: A "Boutique" Firm Faces a World of Change .
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.
Shortening product life cycle
– it is one of the major threat that Camera Leica is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Camera Leica
– 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 Camera Leica.
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 Camera Leica business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Camera Leica 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. Camera Leica can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Camera Leica has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Camera Leica 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.
Regulatory challenges
– Camera Leica 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Camera Leica 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.
Weighted SWOT Analysis of Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change 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 Camera Leica needs to make to build a sustainable competitive advantage.
