Allegheny Ludlum: Research and Engineering Resource Allocation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Allegheny Ludlum: Research and Engineering Resource Allocation
Allegheny Ludlum's (AL) technical vice president, Jack Shilling faces the task of determining how to allocate engineering resources among five areas of technology. AL's technology organization has great strategic importance and has therefore been untouched by the company's headcount and overhead reduction policies. Shilling must anticipate and prepare to meet or explore competitive threats and market opportunities as he prepares to make his allocation decisions. Shilling also considers the following questions: What engineering skills should he look for in new hires? Is the current planning system optimal? What criteria should he use in judging projects? (Includes details of three project proposals which students are asked to evaluate). Under what conditions should AL undertake a development as a joint venture rather than keeping it entirely in-house? Teaching objectives include: 1) Analyze resource allocations to support/sustain technological capabilities and 2) Examine technology strategy formulation process.
Authors :: Dorothy Leonard-Barton, Geoffrey K. Gill
Swot Analysis of "Allegheny Ludlum: Research and Engineering Resource Allocation" written by Dorothy Leonard-Barton, Geoffrey K. Gill includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shilling Allegheny facing as an external strategic factors. Some of the topics covered in Allegheny Ludlum: Research and Engineering Resource Allocation case study are - Strategic Management Strategies, Design, Joint ventures, Leadership, Manufacturing, Policy, Strategic planning, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the Allegheny Ludlum: Research and Engineering Resource Allocation casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, technology disruption,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Allegheny Ludlum: Research and Engineering Resource Allocation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Allegheny Ludlum: Research and Engineering Resource Allocation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shilling Allegheny, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shilling Allegheny 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 Allegheny Ludlum: Research and Engineering Resource Allocation can be done for the following purposes –
1. Strategic planning using facts provided in Allegheny Ludlum: Research and Engineering Resource Allocation case study
2. Improving business portfolio management of Shilling Allegheny
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 Shilling Allegheny
Strengths Allegheny Ludlum: Research and Engineering Resource Allocation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shilling Allegheny in Allegheny Ludlum: Research and Engineering Resource Allocation Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Shilling Allegheny 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 Shilling Allegheny 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.
Cross disciplinary teams
– Horizontal connected teams at the Shilling Allegheny 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.
High brand equity
– Shilling Allegheny has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shilling Allegheny to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Shilling Allegheny is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Shilling Allegheny has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Allegheny Ludlum: Research and Engineering Resource Allocation 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.
Effective Research and Development (R&D)
– Shilling Allegheny 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 Allegheny Ludlum: Research and Engineering Resource Allocation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Shilling Allegheny 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 Dorothy Leonard-Barton, Geoffrey K. Gill 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Shilling Allegheny digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shilling Allegheny 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
– Allegheny Ludlum: Research and Engineering Resource Allocation firm has clearly differentiated products in the market place. This has enabled Shilling Allegheny to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Shilling Allegheny to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Allegheny Ludlum: Research and Engineering Resource Allocation 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.
Highly skilled collaborators
– Shilling Allegheny 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 Allegheny Ludlum: Research and Engineering Resource Allocation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Allegheny Ludlum: Research and Engineering Resource Allocation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Allegheny Ludlum: Research and Engineering Resource Allocation are -
Products dominated business model
– Even though Shilling Allegheny 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 - Allegheny Ludlum: Research and Engineering Resource Allocation 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 Allegheny Ludlum: Research and Engineering Resource Allocation 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 Allegheny Ludlum: Research and Engineering Resource Allocation can leverage the sales team experience to cultivate customer relationships as Shilling Allegheny is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shilling Allegheny is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Allegheny Ludlum: Research and Engineering Resource Allocation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Allegheny Ludlum: Research and Engineering Resource Allocation 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 Shilling Allegheny 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 Allegheny Ludlum: Research and Engineering Resource Allocation, in the dynamic environment Shilling Allegheny has struggled to respond to the nimble upstart competition. Shilling Allegheny has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Shilling Allegheny 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 Shilling Allegheny, firm in the HBR case study Allegheny Ludlum: Research and Engineering Resource Allocation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Shilling Allegheny has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow decision making process
– As mentioned earlier in the report, Shilling Allegheny 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. Shilling Allegheny 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.
Need for greater diversity
– Shilling Allegheny has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Dorothy Leonard-Barton, Geoffrey K. Gill suggests that, Shilling Allegheny 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 Allegheny Ludlum: Research and Engineering Resource Allocation | 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 Allegheny Ludlum: Research and Engineering Resource Allocation are -
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. Shilling Allegheny can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shilling Allegheny 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, Allegheny Ludlum: Research and Engineering Resource Allocation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Shilling Allegheny has opened avenues for new revenue streams for the organization in the industry. This can help Shilling Allegheny to build a more holistic ecosystem as suggested in the Allegheny Ludlum: Research and Engineering Resource Allocation case study. Shilling Allegheny 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 Shilling Allegheny 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 Shilling Allegheny to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Shilling Allegheny 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.
Developing new processes and practices
– Shilling Allegheny 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shilling Allegheny is facing challenges because of the dominance of functional experts in the organization. Allegheny Ludlum: Research and Engineering Resource Allocation 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.
Building a culture of innovation
– managers at Shilling Allegheny 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.
Loyalty marketing
– Shilling Allegheny 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.
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. Shilling Allegheny can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Shilling Allegheny 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. Shilling Allegheny 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.
Using analytics as competitive advantage
– Shilling Allegheny 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 Allegheny Ludlum: Research and Engineering Resource Allocation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shilling Allegheny 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, Shilling Allegheny can use these opportunities to build new business models that can help the communities that Shilling Allegheny operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats Allegheny Ludlum: Research and Engineering Resource Allocation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Allegheny Ludlum: Research and Engineering Resource Allocation are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shilling Allegheny 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 Allegheny Ludlum: Research and Engineering Resource Allocation .
Stagnating economy with rate increase
– Shilling Allegheny 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.
Shortening product life cycle
– it is one of the major threat that Shilling Allegheny is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Shilling Allegheny with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Shilling Allegheny 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. Shilling Allegheny 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.
High dependence on third party suppliers
– Shilling Allegheny 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.
Consumer confidence and its impact on Shilling Allegheny 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.
Increasing wage structure of Shilling Allegheny
– 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 Shilling Allegheny.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shilling Allegheny 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.
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 Shilling Allegheny in the Technology & Operations sector and impact the bottomline 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 Shilling Allegheny business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Allegheny Ludlum: Research and Engineering Resource Allocation 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 Allegheny Ludlum: Research and Engineering Resource Allocation 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 Allegheny Ludlum: Research and Engineering Resource Allocation 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 Allegheny Ludlum: Research and Engineering Resource Allocation 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 Allegheny Ludlum: Research and Engineering Resource Allocation 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 Shilling Allegheny needs to make to build a sustainable competitive advantage.