Case Study Description of Deere & Co. Worldwide Logistics
As a manufacturer and distributor of agriculture equipment, as well as a broad range of construction and forestry equipment, Deere & Co. had a lot riding on the smooth flow of its logistics function. FedEx Logistics provided outsourced transportation services to 11 Deere facilities across North America. But with each of Deere's individual business units responsible for its own logistics activities, and with each unit negotiating a separate service agreement with the FedEx facility, costs and services tended to differ across the units. Deere's manager of logistics design asked a summer intern student to evaluate the company's logistics agreement with FedEx, with a view to identifying opportunities for standardizing costs and services across the business units. The logistics manager is expecting a report containing details of each operation's work flow and cost information, as well as some recommendations for updating Deere's outsourcing arrangements with FedEx Logistics.
Swot Analysis of "Deere & Co. Worldwide Logistics" written by P. Fraser Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Logistics Fedex facing as an external strategic factors. Some of the topics covered in Deere & Co. Worldwide Logistics case study are - Strategic Management Strategies, Organizational structure and Technology & Operations.
Some of the macro environment factors that can be used to understand the Deere & Co. Worldwide Logistics casestudy better are - – challanges to central banks by blockchain based private currencies, technology disruption, wage bills are increasing, geopolitical disruptions, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Deere & Co. Worldwide Logistics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Deere & Co. Worldwide Logistics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Logistics Fedex, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Logistics Fedex 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 Deere & Co. Worldwide Logistics can be done for the following purposes –
1. Strategic planning using facts provided in Deere & Co. Worldwide Logistics case study
2. Improving business portfolio management of Logistics Fedex
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 Logistics Fedex
Strengths Deere & Co. Worldwide Logistics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Logistics Fedex in Deere & Co. Worldwide Logistics Harvard Business Review case study are -
Effective Research and Development (R&D)
– Logistics Fedex 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 Deere & Co. Worldwide Logistics - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Logistics Fedex
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Logistics Fedex does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Technology & Operations field
– Logistics Fedex 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 Logistics Fedex in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Logistics Fedex has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Logistics Fedex has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Logistics Fedex is present in almost all the verticals within the industry. This has provided firm in Deere & Co. Worldwide Logistics 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.
Analytics focus
– Logistics Fedex 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 P. Fraser Johnson 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.
High brand equity
– Logistics Fedex has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Logistics Fedex to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Logistics Fedex is one of the leading recruiters in the industry. Managers in the Deere & Co. Worldwide Logistics are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Logistics Fedex in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Logistics Fedex is one of the most innovative firm in sector. Manager in Deere & Co. Worldwide Logistics 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 Logistics Fedex 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Logistics Fedex digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Logistics Fedex 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.
Weaknesses Deere & Co. Worldwide Logistics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Deere & Co. Worldwide Logistics are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Deere & Co. Worldwide Logistics, is just above the industry average. Logistics Fedex 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.
Need for greater diversity
– Logistics Fedex 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.
Slow decision making process
– As mentioned earlier in the report, Logistics Fedex 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. Logistics Fedex 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.
Low market penetration in new markets
– Outside its home market of Logistics Fedex, firm in the HBR case study Deere & Co. Worldwide Logistics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Logistics Fedex 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.
Aligning sales with marketing
– It come across in the case study Deere & Co. Worldwide Logistics 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 Deere & Co. Worldwide Logistics can leverage the sales team experience to cultivate customer relationships as Logistics Fedex is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, P. Fraser Johnson suggests that, Logistics Fedex 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Deere & Co. Worldwide Logistics, in the dynamic environment Logistics Fedex has struggled to respond to the nimble upstart competition. Logistics Fedex has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Logistics Fedex is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Logistics Fedex needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Logistics Fedex to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Logistics Fedex 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Logistics Fedex 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.
Opportunities Deere & Co. Worldwide Logistics | 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 Deere & Co. Worldwide Logistics are -
Creating value in data economy
– The success of analytics program of Logistics Fedex has opened avenues for new revenue streams for the organization in the industry. This can help Logistics Fedex to build a more holistic ecosystem as suggested in the Deere & Co. Worldwide Logistics case study. Logistics Fedex can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Logistics Fedex 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
– Logistics Fedex can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
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 Logistics Fedex 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.
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. Logistics Fedex 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. Logistics Fedex 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.
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. Logistics Fedex can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Logistics Fedex in the consumer business. Now Logistics Fedex can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Logistics Fedex 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.
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. Logistics Fedex can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Logistics Fedex 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, Deere & Co. Worldwide Logistics, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Logistics Fedex can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Deere & Co. Worldwide Logistics 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
– Logistics Fedex 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.
Better consumer reach
– The expansion of the 5G network will help Logistics Fedex to increase its market reach. Logistics Fedex 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.
Threats Deere & Co. Worldwide Logistics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Deere & Co. Worldwide Logistics are -
Consumer confidence and its impact on Logistics Fedex 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 Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Logistics Fedex can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Logistics Fedex is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Logistics Fedex 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. Logistics Fedex can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Regulatory challenges
– Logistics Fedex 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.
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. Logistics Fedex needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Logistics Fedex business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Logistics Fedex has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Logistics Fedex 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.
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 Logistics Fedex in the Technology & Operations sector and impact the bottomline of the organization.
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.
High dependence on third party suppliers
– Logistics Fedex 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.
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 Logistics Fedex.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Logistics Fedex 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 Deere & Co. Worldwide Logistics .
Weighted SWOT Analysis of Deere & Co. Worldwide Logistics 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 Deere & Co. Worldwide Logistics 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 Deere & Co. Worldwide Logistics 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 Deere & Co. Worldwide Logistics 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 Deere & Co. Worldwide Logistics 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 Logistics Fedex needs to make to build a sustainable competitive advantage.