Case Study Description of Novozymes: Cracking the Emerging Markets Code
In 2011, the management of Novozymes, the industrial enzymes leader, reflected on the viability of their positioning in the fast growing, yet increasingly competitive Chinese market. Novozymes, a technological innovation pioneer, was prominent in China's premium enzyme markets, but felt pressure from local low-cost rivals in volume-driven, commoditized segments. How should Novozymes relate to local competitors? By competing on technological innovation only in high-margin verticals? Or through a separate subsidiary with a new low-cost business model for commoditized verticals?
Swot Analysis of "Novozymes: Cracking the Emerging Markets Code" written by Krishna G. Palepu, Karol Misztal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Novozymes Commoditized facing as an external strategic factors. Some of the topics covered in Novozymes: Cracking the Emerging Markets Code case study are - Strategic Management Strategies, Emerging markets, Growth strategy, Marketing, Sales and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Novozymes: Cracking the Emerging Markets Code casestudy better are - – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, geopolitical disruptions, central banks are concerned over increasing inflation, increasing commodity prices, challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, increasing energy prices, etc
Introduction to SWOT Analysis of Novozymes: Cracking the Emerging Markets Code
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Novozymes: Cracking the Emerging Markets Code case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Novozymes Commoditized, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Novozymes Commoditized 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 Novozymes: Cracking the Emerging Markets Code can be done for the following purposes –
1. Strategic planning using facts provided in Novozymes: Cracking the Emerging Markets Code case study
2. Improving business portfolio management of Novozymes Commoditized
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 Novozymes Commoditized
Strengths Novozymes: Cracking the Emerging Markets Code | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Novozymes Commoditized in Novozymes: Cracking the Emerging Markets Code Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Novozymes Commoditized 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
– Novozymes Commoditized is one of the most innovative firm in sector. Manager in Novozymes: Cracking the Emerging Markets Code Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Novozymes Commoditized in the sector have low bargaining power. Novozymes: Cracking the Emerging Markets Code has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Novozymes Commoditized to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Novozymes Commoditized digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Novozymes Commoditized 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.
Analytics focus
– Novozymes Commoditized 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 Krishna G. Palepu, Karol Misztal 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.
Learning organization
- Novozymes Commoditized 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 Novozymes Commoditized is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Novozymes: Cracking the Emerging Markets Code Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Novozymes Commoditized has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Novozymes Commoditized 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 Novozymes Commoditized in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Novozymes Commoditized 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Novozymes: Cracking the Emerging Markets Code firm has clearly differentiated products in the market place. This has enabled Novozymes Commoditized to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Novozymes Commoditized to invest into research and development (R&D) and innovation.
Strong track record of project management
– Novozymes Commoditized 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
– Novozymes Commoditized is present in almost all the verticals within the industry. This has provided firm in Novozymes: Cracking the Emerging Markets Code 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.
Weaknesses Novozymes: Cracking the Emerging Markets Code | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Novozymes: Cracking the Emerging Markets Code are -
Interest costs
– Compare to the competition, Novozymes Commoditized 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Novozymes: Cracking the Emerging Markets Code, it seems that the employees of Novozymes Commoditized 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.
Capital Spending Reduction
– Even during the low interest decade, Novozymes Commoditized has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Aligning sales with marketing
– It come across in the case study Novozymes: Cracking the Emerging Markets Code 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 Novozymes: Cracking the Emerging Markets Code can leverage the sales team experience to cultivate customer relationships as Novozymes Commoditized is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Novozymes Commoditized 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.
Increasing silos among functional specialists
– The organizational structure of Novozymes Commoditized is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Novozymes Commoditized needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Novozymes Commoditized to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Krishna G. Palepu, Karol Misztal suggests that, Novozymes Commoditized 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.
Skills based hiring
– The stress on hiring functional specialists at Novozymes Commoditized 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Novozymes Commoditized is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Novozymes: Cracking the Emerging Markets Code can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Novozymes Commoditized, firm in the HBR case study Novozymes: Cracking the Emerging Markets Code needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Novozymes Commoditized 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.
Opportunities Novozymes: Cracking the Emerging Markets Code | 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 Novozymes: Cracking the Emerging Markets Code are -
Leveraging digital technologies
– Novozymes Commoditized 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.
Developing new processes and practices
– Novozymes Commoditized 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.
Building a culture of innovation
– managers at Novozymes Commoditized 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Novozymes Commoditized 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, Novozymes: Cracking the Emerging Markets Code, 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. Novozymes Commoditized 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, Novozymes Commoditized can use these opportunities to build new business models that can help the communities that Novozymes Commoditized operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Novozymes Commoditized 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Novozymes Commoditized can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Novozymes Commoditized 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 Novozymes: Cracking the Emerging Markets Code - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Novozymes Commoditized to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Novozymes Commoditized 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 Novozymes Commoditized to hire the very best people irrespective of their geographical location.
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. Novozymes Commoditized can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Novozymes Commoditized 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.
Buying journey improvements
– Novozymes Commoditized can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Novozymes: Cracking the Emerging Markets Code 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.
Threats Novozymes: Cracking the Emerging Markets Code External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Novozymes: Cracking the Emerging Markets Code are -
Environmental challenges
– Novozymes Commoditized 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. Novozymes Commoditized can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Novozymes Commoditized 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.
Technology acceleration in Forth Industrial Revolution
– Novozymes Commoditized has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Novozymes Commoditized 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.
Stagnating economy with rate increase
– Novozymes Commoditized 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.
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. Novozymes Commoditized needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Novozymes Commoditized 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 Novozymes: Cracking the Emerging Markets Code .
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 Novozymes Commoditized business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Novozymes Commoditized is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Novozymes Commoditized with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Novozymes Commoditized
– 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 Novozymes Commoditized.
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.
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 Novozymes Commoditized.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Novozymes: Cracking the Emerging Markets Code, Novozymes Commoditized 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 Novozymes: Cracking the Emerging Markets Code 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 Novozymes: Cracking the Emerging Markets Code 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 Novozymes: Cracking the Emerging Markets Code 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 Novozymes: Cracking the Emerging Markets Code 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 Novozymes: Cracking the Emerging Markets Code 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 Novozymes Commoditized needs to make to build a sustainable competitive advantage.
