Grounding: Did Corporate Governance Fail at Swissair? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Grounding: Did Corporate Governance Fail at Swissair?
The board and management of Swissair were challenged in a new way after the country decided in 1992 against joining the European Economic Area. Swissair had to remain globally competitive or run the risk of becoming an insignificant regional airline given that it no longer operated under the same conditions as airlines in the European aviation market. Describes the strategic decisions and developments until the collapse of the airline in 2001, with a focus on corporate governance issues.
Swot Analysis of "Grounding: Did Corporate Governance Fail at Swissair?" written by Ulrich Steger, Helga Krapf includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Swissair Grounding facing as an external strategic factors. Some of the topics covered in Grounding: Did Corporate Governance Fail at Swissair? case study are - Strategic Management Strategies, Corporate governance, Decision making and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Grounding: Did Corporate Governance Fail at Swissair? casestudy better are - – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Grounding: Did Corporate Governance Fail at Swissair?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Grounding: Did Corporate Governance Fail at Swissair? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Swissair Grounding, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Swissair Grounding 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 Grounding: Did Corporate Governance Fail at Swissair? can be done for the following purposes –
1. Strategic planning using facts provided in Grounding: Did Corporate Governance Fail at Swissair? case study
2. Improving business portfolio management of Swissair Grounding
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 Swissair Grounding
Strengths Grounding: Did Corporate Governance Fail at Swissair? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Swissair Grounding in Grounding: Did Corporate Governance Fail at Swissair? Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Swissair Grounding in the sector have low bargaining power. Grounding: Did Corporate Governance Fail at Swissair? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Swissair Grounding to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Swissair Grounding 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 Swissair Grounding 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.
Operational resilience
– The operational resilience strategy in the Grounding: Did Corporate Governance Fail at Swissair? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Swissair Grounding digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Swissair Grounding 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.
Ability to recruit top talent
– Swissair Grounding is one of the leading recruiters in the industry. Managers in the Grounding: Did Corporate Governance Fail at Swissair? 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)
– Swissair Grounding 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 Grounding: Did Corporate Governance Fail at Swissair? - 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 brand equity
– Swissair Grounding has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Swissair Grounding to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Swissair Grounding is present in almost all the verticals within the industry. This has provided firm in Grounding: Did Corporate Governance Fail at Swissair? 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.
Successful track record of launching new products
– Swissair Grounding has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Swissair Grounding 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
– Grounding: Did Corporate Governance Fail at Swissair? firm has clearly differentiated products in the market place. This has enabled Swissair Grounding to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Swissair Grounding to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Swissair Grounding 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.
Weaknesses Grounding: Did Corporate Governance Fail at Swissair? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Grounding: Did Corporate Governance Fail at Swissair? are -
No frontier risks strategy
– After analyzing the HBR case study Grounding: Did Corporate Governance Fail at Swissair?, 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.
Low market penetration in new markets
– Outside its home market of Swissair Grounding, firm in the HBR case study Grounding: Did Corporate Governance Fail at Swissair? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Swissair Grounding 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 - Grounding: Did Corporate Governance Fail at Swissair? 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 Grounding: Did Corporate Governance Fail at Swissair? 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 Grounding: Did Corporate Governance Fail at Swissair? can leverage the sales team experience to cultivate customer relationships as Swissair Grounding is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Swissair Grounding 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. Swissair Grounding 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.
High cash cycle compare to competitors
Swissair Grounding has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As Grounding: Did Corporate Governance Fail at Swissair? HBR case study mentions - Swissair Grounding 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Swissair Grounding supply chain. Even after few cautionary changes mentioned in the HBR case study - Grounding: Did Corporate Governance Fail at Swissair?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Swissair Grounding vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Grounding: Did Corporate Governance Fail at Swissair?, in the dynamic environment Swissair Grounding has struggled to respond to the nimble upstart competition. Swissair Grounding has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Grounding: Did Corporate Governance Fail at Swissair? 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 Swissair Grounding has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Ulrich Steger, Helga Krapf suggests that, Swissair Grounding 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.
Opportunities Grounding: Did Corporate Governance Fail at Swissair? | 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 Grounding: Did Corporate Governance Fail at Swissair? are -
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 Swissair Grounding in the consumer business. Now Swissair Grounding can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Swissair Grounding has opened avenues for new revenue streams for the organization in the industry. This can help Swissair Grounding to build a more holistic ecosystem as suggested in the Grounding: Did Corporate Governance Fail at Swissair? case study. Swissair Grounding can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Swissair Grounding 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 Swissair Grounding to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Swissair Grounding can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Swissair Grounding can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Grounding: Did Corporate Governance Fail at Swissair? 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.
Loyalty marketing
– Swissair Grounding 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.
Manufacturing automation
– Swissair Grounding 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.
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. Swissair Grounding can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Swissair Grounding 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.
Using analytics as competitive advantage
– Swissair Grounding 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 Grounding: Did Corporate Governance Fail at Swissair? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Swissair Grounding to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Swissair Grounding to increase its market reach. Swissair Grounding 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.
Learning at scale
– Online learning technologies has now opened space for Swissair Grounding 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Swissair Grounding 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.
Threats Grounding: Did Corporate Governance Fail at Swissair? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Grounding: Did Corporate Governance Fail at Swissair? are -
Shortening product life cycle
– it is one of the major threat that Swissair Grounding is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Swissair Grounding demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Swissair Grounding.
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 Swissair Grounding business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Swissair Grounding 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 Grounding: Did Corporate Governance Fail at Swissair? .
Regulatory challenges
– Swissair Grounding 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.
Increasing wage structure of Swissair Grounding
– 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 Swissair Grounding.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Swissair Grounding in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Swissair Grounding with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Swissair Grounding 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.
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 Swissair Grounding in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Swissair Grounding 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. Swissair Grounding can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Grounding: Did Corporate Governance Fail at Swissair? 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 Grounding: Did Corporate Governance Fail at Swissair? 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 Grounding: Did Corporate Governance Fail at Swissair? 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 Grounding: Did Corporate Governance Fail at Swissair? 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 Grounding: Did Corporate Governance Fail at Swissair? 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 Swissair Grounding needs to make to build a sustainable competitive advantage.