Case Study Description of BMP POLICY MEETING - General Instructions
This case includes supplements.Five-party, four-issue internal negotiation among employees of a major engine manufacturer to agree on procurement guidelines in preparation for external negotiations with suppliers. Eagle Aircraft Engines, a manufacturer of engines for military and commercial aircraft, is preparing to negotiate a major five-year procurement for over 1000 parts from its suppliers. Its Airfoils and Casting Division (A&C) is responsible for purchasing roughly 100 of these parts. In preparation for the negotiations with suppliers, the five key personnel within A&C need to generate a "Business-Managed Procurement" policy in which A&C personnel must unanimously agree on four schedule and quality programs. The key personnel involved in the internal negotiation include three engineers, a buyer, and a financial analyst. They have all been sent a memo from the Purchasing Director outlining the overall procurement strategy. The Purchasing Director is putting pressure on them for consensus, emphasizing the importance of certain issues over others in preparation for his/her own negotiations with suppliers. This is a role play case.
Authors :: Paddy Moore, Hallam Movius, Lawrence Susskind
Swot Analysis of "BMP POLICY MEETING - General Instructions" written by Paddy Moore, Hallam Movius, Lawrence Susskind includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Procurement Suppliers facing as an external strategic factors. Some of the topics covered in BMP POLICY MEETING - General Instructions case study are - Strategic Management Strategies, Design, Negotiations, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the BMP POLICY MEETING - General Instructions casestudy better are - – increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing energy prices, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of BMP POLICY MEETING - General Instructions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BMP POLICY MEETING - General Instructions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Procurement Suppliers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Procurement Suppliers 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 BMP POLICY MEETING - General Instructions can be done for the following purposes –
1. Strategic planning using facts provided in BMP POLICY MEETING - General Instructions case study
2. Improving business portfolio management of Procurement Suppliers
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 Procurement Suppliers
Strengths BMP POLICY MEETING - General Instructions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Procurement Suppliers in BMP POLICY MEETING - General Instructions Harvard Business Review case study are -
Organizational Resilience of Procurement Suppliers
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Procurement Suppliers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Procurement Suppliers is one of the most innovative firm in sector. Manager in BMP POLICY MEETING - General Instructions Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Procurement Suppliers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Procurement Suppliers 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
– Procurement Suppliers 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 Paddy Moore, Hallam Movius, Lawrence Susskind 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.
High switching costs
– The high switching costs that Procurement Suppliers 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.
Successful track record of launching new products
– Procurement Suppliers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Procurement Suppliers has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Strategy & Execution industry
– BMP POLICY MEETING - General Instructions firm has clearly differentiated products in the market place. This has enabled Procurement Suppliers to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Procurement Suppliers to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Procurement Suppliers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Procurement Suppliers 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 BMP POLICY MEETING - General Instructions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Procurement Suppliers 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.
Training and development
– Procurement Suppliers has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in BMP POLICY MEETING - General Instructions 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.
Learning organization
- Procurement Suppliers 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 Procurement Suppliers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in BMP POLICY MEETING - General Instructions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses BMP POLICY MEETING - General Instructions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BMP POLICY MEETING - General Instructions are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study BMP POLICY MEETING - General Instructions, in the dynamic environment Procurement Suppliers has struggled to respond to the nimble upstart competition. Procurement Suppliers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Procurement Suppliers 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.
Lack of clear differentiation of Procurement Suppliers products
– To increase the profitability and margins on the products, Procurement Suppliers needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study BMP POLICY MEETING - General Instructions 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 Procurement Suppliers 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Procurement Suppliers 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 BMP POLICY MEETING - General Instructions 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 BMP POLICY MEETING - General Instructions can leverage the sales team experience to cultivate customer relationships as Procurement Suppliers is planning to shift buying processes online.
Need for greater diversity
– Procurement Suppliers 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.
Increasing silos among functional specialists
– The organizational structure of Procurement Suppliers is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Procurement Suppliers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Procurement Suppliers to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Procurement Suppliers 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 - BMP POLICY MEETING - General Instructions should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BMP POLICY MEETING - General Instructions, is just above the industry average. Procurement Suppliers 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.
Interest costs
– Compare to the competition, Procurement Suppliers 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.
Opportunities BMP POLICY MEETING - General Instructions | 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 BMP POLICY MEETING - General Instructions are -
Building a culture of innovation
– managers at Procurement Suppliers 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Procurement Suppliers 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Procurement Suppliers is facing challenges because of the dominance of functional experts in the organization. BMP POLICY MEETING - General Instructions 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.
Using analytics as competitive advantage
– Procurement Suppliers 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 BMP POLICY MEETING - General Instructions - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Procurement Suppliers to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Procurement Suppliers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Procurement Suppliers in the consumer business. Now Procurement Suppliers can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Procurement Suppliers 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.
Buying journey improvements
– Procurement Suppliers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. BMP POLICY MEETING - General Instructions 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.
Developing new processes and practices
– Procurement Suppliers 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Procurement Suppliers can use these opportunities to build new business models that can help the communities that Procurement Suppliers operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Procurement Suppliers 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Procurement Suppliers 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, BMP POLICY MEETING - General Instructions, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Procurement Suppliers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats BMP POLICY MEETING - General Instructions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BMP POLICY MEETING - General Instructions are -
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 Procurement Suppliers business can come under increasing regulations regarding data privacy, data security, etc.
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 Procurement Suppliers.
Shortening product life cycle
– it is one of the major threat that Procurement Suppliers is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Procurement Suppliers 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.
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 Procurement Suppliers 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.
Environmental challenges
– Procurement Suppliers 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. Procurement Suppliers can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study BMP POLICY MEETING - General Instructions, Procurement Suppliers 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 .
Regulatory challenges
– Procurement Suppliers 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 Procurement Suppliers in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Procurement Suppliers 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.
Consumer confidence and its impact on Procurement Suppliers 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.
Increasing wage structure of Procurement Suppliers
– 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 Procurement Suppliers.
Weighted SWOT Analysis of BMP POLICY MEETING - General Instructions 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 BMP POLICY MEETING - General Instructions 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 BMP POLICY MEETING - General Instructions 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 BMP POLICY MEETING - General Instructions 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 BMP POLICY MEETING - General Instructions 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 Procurement Suppliers needs to make to build a sustainable competitive advantage.