BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer
Confidential Instructions for J. Ferguson, Buyer for product #PON093.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 - Confidential Instructions for J. Ferguson, Buyer" 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 - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, central banks are concerned over increasing inflation, increasing commodity prices, increasing government debt because of Covid-19 spendings,
wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer can be done for the following purposes –
1. Strategic planning using facts provided in BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Procurement Suppliers in BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Highly skilled collaborators
– Procurement Suppliers 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 BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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 - Confidential Instructions for J. Ferguson, Buyer 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.
Low bargaining power of suppliers
– Suppliers of Procurement Suppliers in the sector have low bargaining power. BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer 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.
Diverse revenue streams
– Procurement Suppliers is present in almost all the verticals within the industry. This has provided firm in BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer 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 recruit top talent
– Procurement Suppliers is one of the leading recruiters in the industry. Managers in the BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 - Confidential Instructions for J. Ferguson, Buyer Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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 - Confidential Instructions for J. Ferguson, Buyer - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer are -
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer, 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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer 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.
Skills based hiring
– The stress on hiring functional specialists at Procurement Suppliers 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 decision making process
– As mentioned earlier in the report, Procurement Suppliers 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. Procurement Suppliers 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.
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 - Confidential Instructions for J. Ferguson, Buyer should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer can leverage the sales team experience to cultivate customer relationships as Procurement Suppliers is planning to shift buying processes online.
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.
Opportunities BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer | 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 - Confidential Instructions for J. Ferguson, Buyer are -
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 - Confidential Instructions for J. Ferguson, Buyer case study. Procurement Suppliers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 - Confidential Instructions for J. Ferguson, Buyer, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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. Procurement Suppliers 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. Procurement Suppliers 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.
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.
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 - Confidential Instructions for J. Ferguson, Buyer 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.
Loyalty marketing
– Procurement Suppliers has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Procurement Suppliers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
Threats BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer are -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Procurement Suppliers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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 - Confidential Instructions for J. Ferguson, Buyer .
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 - Confidential Instructions for J. Ferguson, Buyer, 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 .
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.
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.
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.
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.
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.
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.
Weighted SWOT Analysis of BMP POLICY MEETING - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer 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 - Confidential Instructions for J. Ferguson, Buyer 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.
