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 commodity prices, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
increasing energy prices, technology disruption, 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 -
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.
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.
Ability to lead change in Strategy & Execution field
– Procurement Suppliers 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 Procurement Suppliers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Procurement Suppliers in the sector have low bargaining power. BMP POLICY MEETING - General Instructions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Procurement Suppliers to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Procurement Suppliers is one of the leading recruiters in the industry. Managers in the BMP POLICY MEETING - General Instructions are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
High brand equity
– Procurement Suppliers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Procurement Suppliers to keep acquiring new customers and building profitable relationship with both the new and loyal 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.
Diverse revenue streams
– Procurement Suppliers is present in almost all the verticals within the industry. This has provided firm in BMP POLICY MEETING - General Instructions 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 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study BMP POLICY MEETING - General Instructions, it seems that the employees of Procurement Suppliers 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Procurement Suppliers is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BMP POLICY MEETING - General Instructions can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Paddy Moore, Hallam Movius, Lawrence Susskind suggests that, Procurement Suppliers 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the BMP POLICY MEETING - General Instructions 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 Procurement Suppliers has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As BMP POLICY MEETING - General Instructions HBR case study mentions - Procurement Suppliers 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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study BMP POLICY MEETING - General Instructions, 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.
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 -
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.
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 Procurement Suppliers 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.
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.
Better consumer reach
– The expansion of the 5G network will help Procurement Suppliers to increase its market reach. Procurement Suppliers 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Procurement Suppliers 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 Procurement Suppliers to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Procurement Suppliers 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.
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.
Leveraging digital technologies
– Procurement Suppliers 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.
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. Procurement Suppliers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Procurement Suppliers has opened avenues for new revenue streams for the organization in the industry. This can help Procurement Suppliers to build a more holistic ecosystem as suggested in the BMP POLICY MEETING - General Instructions case study. Procurement Suppliers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
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.
Technology acceleration in Forth Industrial Revolution
– Procurement Suppliers has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Procurement Suppliers 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.
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. Procurement Suppliers needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Procurement Suppliers 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 BMP POLICY MEETING - General Instructions .
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.
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. Procurement Suppliers can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Stagnating economy with rate increase
– Procurement Suppliers 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.
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.
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.