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 - – cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing energy prices, increasing household debt because of falling income levels, there is backlash against globalization,
challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, 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 -
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.
Operational resilience
– The operational resilience strategy in the Leica Camera: A "Boutique" Firm Faces a World of Change 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Camera Leica digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Camera Leica 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.
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.
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.
Successful track record of launching new products
– Camera Leica has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Camera Leica 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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Camera Leica 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.
Diverse revenue streams
– Camera Leica is present in almost all the verticals within the industry. This has provided firm in Leica Camera: A "Boutique" Firm Faces a World of Change 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 lead change in Strategy & Execution field
– Camera Leica 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 Camera Leica in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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 -
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.
High cash cycle compare to competitors
Camera Leica 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 to strategic competitive environment developments
– As Leica Camera: A "Boutique" Firm Faces a World of Change HBR case study mentions - Camera Leica takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Bill Chapman, Gerry Yemen, S. Venkataraman suggests that, Camera Leica 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.
Aligning sales with marketing
– It come across in the case study Leica Camera: A "Boutique" Firm Faces a World of Change 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 Leica Camera: A "Boutique" Firm Faces a World of Change can leverage the sales team experience to cultivate customer relationships as Camera Leica is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Leica Camera: A "Boutique" Firm Faces a World of Change 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 Camera Leica has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Camera Leica needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 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.
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.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Camera Leica can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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 Camera Leica 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.
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.
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.
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.
Leveraging digital technologies
– Camera Leica 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
– 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Camera Leica 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.
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.
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.
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. Camera Leica 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. Camera Leica 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.
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. Camera Leica can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 -
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 Camera Leica in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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.
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.
Consumer confidence and its impact on Camera Leica 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 Camera Leica.
High dependence on third party suppliers
– Camera Leica 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.
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 .
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Camera Leica with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.