Case Study Description of Vickers, Inc.: Omaha Plant
The new vice president of the industrial group at Vickers, Inc., a pump manufacturer, must decide whether to shut down the company's largest production facility located in Omaha, Nebraska. The plant is plagued by antiquated equipment, antagonistic union relations, and an unclear mission for the future.
Swot Analysis of "Vickers, Inc.: Omaha Plant" written by Helen Han includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Omaha Vickers facing as an external strategic factors. Some of the topics covered in Vickers, Inc.: Omaha Plant case study are - Strategic Management Strategies, Operations management, Strategy execution and Technology & Operations.
Some of the macro environment factors that can be used to understand the Vickers, Inc.: Omaha Plant casestudy better are - – cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Vickers, Inc.: Omaha Plant
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Vickers, Inc.: Omaha Plant case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Omaha Vickers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Omaha Vickers 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 Vickers, Inc.: Omaha Plant can be done for the following purposes –
1. Strategic planning using facts provided in Vickers, Inc.: Omaha Plant case study
2. Improving business portfolio management of Omaha Vickers
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 Omaha Vickers
Strengths Vickers, Inc.: Omaha Plant | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Omaha Vickers in Vickers, Inc.: Omaha Plant Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Omaha Vickers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Omaha Vickers is one of the leading recruiters in the industry. Managers in the Vickers, Inc.: Omaha Plant 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)
– Omaha Vickers 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 Vickers, Inc.: Omaha Plant - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Omaha Vickers is one of the most innovative firm in sector. Manager in Vickers, Inc.: Omaha Plant Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Omaha Vickers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Omaha Vickers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Omaha Vickers 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 Helen Han 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.
Low bargaining power of suppliers
– Suppliers of Omaha Vickers in the sector have low bargaining power. Vickers, Inc.: Omaha Plant has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Omaha Vickers to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Omaha Vickers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Omaha Vickers 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Omaha Vickers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Omaha Vickers 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.
Sustainable margins compare to other players in Technology & Operations industry
– Vickers, Inc.: Omaha Plant firm has clearly differentiated products in the market place. This has enabled Omaha Vickers to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Omaha Vickers to invest into research and development (R&D) and innovation.
Training and development
– Omaha Vickers has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Vickers, Inc.: Omaha Plant 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.
Strong track record of project management
– Omaha Vickers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Vickers, Inc.: Omaha Plant | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vickers, Inc.: Omaha Plant are -
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 Omaha Vickers supply chain. Even after few cautionary changes mentioned in the HBR case study - Vickers, Inc.: Omaha Plant, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Omaha Vickers vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Omaha Vickers 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 bargaining power of channel partners
– Because of the regulatory requirements, Helen Han suggests that, Omaha Vickers 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Vickers, Inc.: Omaha Plant, is just above the industry average. Omaha Vickers 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.
Lack of clear differentiation of Omaha Vickers products
– To increase the profitability and margins on the products, Omaha Vickers needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Omaha Vickers 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. Omaha Vickers 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
Omaha Vickers 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.
Low market penetration in new markets
– Outside its home market of Omaha Vickers, firm in the HBR case study Vickers, Inc.: Omaha Plant needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Vickers, Inc.: Omaha Plant 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 Omaha Vickers has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Vickers, Inc.: Omaha Plant 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 Omaha Vickers 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Omaha Vickers is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Omaha Vickers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Omaha Vickers to focus more on services rather than just following the product oriented approach.
Opportunities Vickers, Inc.: Omaha Plant | 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 Vickers, Inc.: Omaha Plant are -
Loyalty marketing
– Omaha Vickers 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Omaha Vickers 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Omaha Vickers can use these opportunities to build new business models that can help the communities that Omaha Vickers operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Better consumer reach
– The expansion of the 5G network will help Omaha Vickers to increase its market reach. Omaha Vickers 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Omaha Vickers is facing challenges because of the dominance of functional experts in the organization. Vickers, Inc.: Omaha Plant 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.
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 Omaha Vickers in the consumer business. Now Omaha Vickers can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Omaha Vickers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Vickers, Inc.: Omaha Plant 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.
Leveraging digital technologies
– Omaha Vickers 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.
Creating value in data economy
– The success of analytics program of Omaha Vickers has opened avenues for new revenue streams for the organization in the industry. This can help Omaha Vickers to build a more holistic ecosystem as suggested in the Vickers, Inc.: Omaha Plant case study. Omaha Vickers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Omaha Vickers 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 Technology & Operations segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Omaha Vickers 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. Omaha Vickers 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.
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. Omaha Vickers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Omaha Vickers 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.
Threats Vickers, Inc.: Omaha Plant External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Vickers, Inc.: Omaha Plant 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 Omaha Vickers in the Technology & Operations sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Omaha Vickers 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Omaha Vickers 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 Vickers, Inc.: Omaha Plant .
Increasing wage structure of Omaha Vickers
– 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 Omaha Vickers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Omaha Vickers 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.
Consumer confidence and its impact on Omaha Vickers 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.
Shortening product life cycle
– it is one of the major threat that Omaha Vickers is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Omaha Vickers 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 Technology & Operations industry regulations.
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. Omaha Vickers 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Omaha Vickers can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Omaha Vickers business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Omaha Vickers 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 Vickers, Inc.: Omaha Plant 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 Vickers, Inc.: Omaha Plant 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 Vickers, Inc.: Omaha Plant 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 Vickers, Inc.: Omaha Plant 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 Vickers, Inc.: Omaha Plant 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 Omaha Vickers needs to make to build a sustainable competitive advantage.
