Numico (A): Delivering Innovation Through the Supply Chain SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Numico (A): Delivering Innovation Through the Supply Chain
Numico, Europe's second-largest infant food manufacturer, decides to refocus its strategy on its core markets after an ill-fated incursion into the U.S. vitamin market that has left it with large losses. An integral part of the strategy is to launch new and innovative products that address previously untapped needs. Follows the challenges facing Numico and its first supplier of finished products during the launch of the first product under the new strategy. A 2004 EFMD award winner.
Authors :: Carlos Cordon, Thomas E. Vollmann, Luis Vivanco
Swot Analysis of "Numico (A): Delivering Innovation Through the Supply Chain" written by Carlos Cordon, Thomas E. Vollmann, Luis Vivanco includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Numico Incursion facing as an external strategic factors. Some of the topics covered in Numico (A): Delivering Innovation Through the Supply Chain case study are - Strategic Management Strategies, Strategy execution, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Numico (A): Delivering Innovation Through the Supply Chain casestudy better are - – increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , wage bills are increasing, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Numico (A): Delivering Innovation Through the Supply Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Numico (A): Delivering Innovation Through the Supply Chain case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Numico Incursion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Numico Incursion 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 Numico (A): Delivering Innovation Through the Supply Chain can be done for the following purposes –
1. Strategic planning using facts provided in Numico (A): Delivering Innovation Through the Supply Chain case study
2. Improving business portfolio management of Numico Incursion
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Numico Incursion
Strengths Numico (A): Delivering Innovation Through the Supply Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Numico Incursion in Numico (A): Delivering Innovation Through the Supply Chain Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Numico (A): Delivering Innovation Through the Supply Chain 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.
Sustainable margins compare to other players in Technology & Operations industry
– Numico (A): Delivering Innovation Through the Supply Chain firm has clearly differentiated products in the market place. This has enabled Numico Incursion to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Numico Incursion to invest into research and development (R&D) and innovation.
Ability to lead change in Technology & Operations field
– Numico Incursion 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 Numico Incursion in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Numico Incursion has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Numico Incursion to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Numico Incursion 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 Carlos Cordon, Thomas E. Vollmann, Luis Vivanco 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.
Innovation driven organization
– Numico Incursion is one of the most innovative firm in sector. Manager in Numico (A): Delivering Innovation Through the Supply Chain Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Numico Incursion 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 Numico (A): Delivering Innovation Through the Supply Chain - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Numico Incursion has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Numico (A): Delivering Innovation Through the Supply Chain 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
- Numico Incursion 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 Numico Incursion is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Numico (A): Delivering Innovation Through the Supply Chain Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Numico Incursion has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Numico Incursion 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.
High switching costs
– The high switching costs that Numico Incursion 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.
Highly skilled collaborators
– Numico Incursion 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 Numico (A): Delivering Innovation Through the Supply Chain HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Numico (A): Delivering Innovation Through the Supply Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Numico (A): Delivering Innovation Through the Supply Chain are -
Skills based hiring
– The stress on hiring functional specialists at Numico Incursion 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.
High cash cycle compare to competitors
Numico Incursion 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Numico Incursion is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Numico (A): Delivering Innovation Through the Supply Chain can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Numico (A): Delivering Innovation Through the Supply Chain, is just above the industry average. Numico Incursion 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Numico (A): Delivering Innovation Through the Supply Chain, it seems that the employees of Numico Incursion 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Numico Incursion 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.
Need for greater diversity
– Numico Incursion 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 Numico Incursion is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Numico Incursion needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Numico Incursion to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Numico Incursion 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Numico (A): Delivering Innovation Through the Supply Chain 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 Numico Incursion has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Numico (A): Delivering Innovation Through the Supply Chain, in the dynamic environment Numico Incursion has struggled to respond to the nimble upstart competition. Numico Incursion has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Numico (A): Delivering Innovation Through the Supply Chain | 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 Numico (A): Delivering Innovation Through the Supply Chain are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Numico Incursion 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, Numico (A): Delivering Innovation Through the Supply Chain, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Numico Incursion 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 Numico (A): Delivering Innovation Through the Supply Chain - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Numico Incursion to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Numico Incursion can use these opportunities to build new business models that can help the communities that Numico Incursion operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Numico Incursion is facing challenges because of the dominance of functional experts in the organization. Numico (A): Delivering Innovation Through the Supply Chain 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.
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 Numico Incursion to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Numico Incursion can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Numico (A): Delivering Innovation Through the Supply Chain 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Numico Incursion 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 Numico Incursion to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Numico Incursion 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Numico Incursion in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
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. Numico Incursion can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Numico Incursion can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Numico Incursion can develop new processes and procedures in Technology & Operations 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Numico Incursion can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Numico (A): Delivering Innovation Through the Supply Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Numico (A): Delivering Innovation Through the Supply Chain 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 Numico Incursion.
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 Numico Incursion in the Technology & Operations sector and impact the bottomline of the organization.
Consumer confidence and its impact on Numico Incursion 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Numico (A): Delivering Innovation Through the Supply Chain, Numico Incursion may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Numico Incursion in the Technology & Operations industry. The Technology & Operations 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.
Technology acceleration in Forth Industrial Revolution
– Numico Incursion has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Numico Incursion needs to keep up with the evolution of technology in the Technology & Operations 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Numico Incursion with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Numico Incursion needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Environmental challenges
– Numico Incursion 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. Numico Incursion can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
High dependence on third party suppliers
– Numico Incursion 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.
Shortening product life cycle
– it is one of the major threat that Numico Incursion is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Numico Incursion business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Numico Incursion 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.
Weighted SWOT Analysis of Numico (A): Delivering Innovation Through the Supply Chain 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 Numico (A): Delivering Innovation Through the Supply Chain 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 Numico (A): Delivering Innovation Through the Supply Chain 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 Numico (A): Delivering Innovation Through the Supply Chain 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 Numico (A): Delivering Innovation Through the Supply Chain 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 Numico Incursion needs to make to build a sustainable competitive advantage.
