CH2M Hill: A Private Firm in a Public World SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
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Case Study SWOT Analysis Solution
Case Study Description of CH2M Hill: A Private Firm in a Public World
CH2M Hill was an employee-owned and controlled professional engineering services firm providing engineering, construction, consulting, design and design-build, procurement, engineering-procurement-construction (EPC), operations and maintenance, program management and technical services to customers all over the world. A large portion of the company's project business was funded by governments. With $5.9 billion in sales in 2015 and 25,000 employees worldwide, the company was a global player. But in 2014 CH2M Hill posted record losses. A multitude of project and contract cost overruns around the world had resulted in losses that threatened the firm's very survival. A private capital equity injection had provided critical refinancing - but at the loss of pure employee ownership and control. Now in 2016, after returning to profitability, many of the firm's core owners, its employees, questioned whether the firm's unique employee ownership structure would survive.
Swot Analysis of "CH2M Hill: A Private Firm in a Public World" written by Michael Moffett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ch2m Hill facing as an external strategic factors. Some of the topics covered in CH2M Hill: A Private Firm in a Public World case study are - Strategic Management Strategies, Financial management, International business and Finance & Accounting.
Some of the macro environment factors that can be used to understand the CH2M Hill: A Private Firm in a Public World casestudy better are - – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, etc
Introduction to SWOT Analysis of CH2M Hill: A Private Firm in a Public World
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CH2M Hill: A Private Firm in a Public World case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ch2m Hill, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ch2m Hill 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 CH2M Hill: A Private Firm in a Public World can be done for the following purposes –
1. Strategic planning using facts provided in CH2M Hill: A Private Firm in a Public World case study
2. Improving business portfolio management of Ch2m Hill
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ch2m Hill
Strengths CH2M Hill: A Private Firm in a Public World | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ch2m Hill in CH2M Hill: A Private Firm in a Public World Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ch2m Hill 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.
Low bargaining power of suppliers
– Suppliers of Ch2m Hill in the sector have low bargaining power. CH2M Hill: A Private Firm in a Public World has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ch2m Hill to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Ch2m Hill has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ch2m Hill to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Ch2m Hill is present in almost all the verticals within the industry. This has provided firm in CH2M Hill: A Private Firm in a Public World 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.
Training and development
– Ch2m Hill has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in CH2M Hill: A Private Firm in a Public World 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.
Highly skilled collaborators
– Ch2m Hill 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 CH2M Hill: A Private Firm in a Public World HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Ch2m Hill is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Ch2m Hill is one of the leading recruiters in the industry. Managers in the CH2M Hill: A Private Firm in a Public World are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Ch2m Hill is one of the most innovative firm in sector. Manager in CH2M Hill: A Private Firm in a Public World Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Ch2m Hill in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Ch2m Hill
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ch2m Hill does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Ch2m Hill 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 Michael Moffett 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.
Weaknesses CH2M Hill: A Private Firm in a Public World | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CH2M Hill: A Private Firm in a Public World are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study CH2M Hill: A Private Firm in a Public World, is just above the industry average. Ch2m Hill 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.
Skills based hiring
– The stress on hiring functional specialists at Ch2m Hill 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.
Need for greater diversity
– Ch2m Hill 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.
Low market penetration in new markets
– Outside its home market of Ch2m Hill, firm in the HBR case study CH2M Hill: A Private Firm in a Public World needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Ch2m Hill 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael Moffett suggests that, Ch2m Hill 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.
Products dominated business model
– Even though Ch2m Hill 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 - CH2M Hill: A Private Firm in a Public World should strive to include more intangible value offerings along with its core products and services.
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 Ch2m Hill supply chain. Even after few cautionary changes mentioned in the HBR case study - CH2M Hill: A Private Firm in a Public World, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ch2m Hill vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study CH2M Hill: A Private Firm in a Public World 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 CH2M Hill: A Private Firm in a Public World can leverage the sales team experience to cultivate customer relationships as Ch2m Hill is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study CH2M Hill: A Private Firm in a Public World 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 Ch2m Hill 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study CH2M Hill: A Private Firm in a Public World, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities CH2M Hill: A Private Firm in a Public World | 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 CH2M Hill: A Private Firm in a Public World are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ch2m Hill can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Ch2m Hill 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 Finance & Accounting segment.
Using analytics as competitive advantage
– Ch2m Hill 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 CH2M Hill: A Private Firm in a Public World - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ch2m Hill to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ch2m Hill is facing challenges because of the dominance of functional experts in the organization. CH2M Hill: A Private Firm in a Public World 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ch2m Hill 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, CH2M Hill: A Private Firm in a Public World, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Ch2m Hill in the consumer business. Now Ch2m Hill can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ch2m Hill in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Loyalty marketing
– Ch2m Hill 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.
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 Ch2m Hill 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.
Leveraging digital technologies
– Ch2m Hill 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ch2m Hill 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 Ch2m Hill to hire the very best people irrespective of their geographical location.
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. Ch2m Hill can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Ch2m Hill can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats CH2M Hill: A Private Firm in a Public World External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CH2M Hill: A Private Firm in a Public World are -
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.
Stagnating economy with rate increase
– Ch2m Hill 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study CH2M Hill: A Private Firm in a Public World, Ch2m Hill may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ch2m Hill in the Finance & Accounting industry. The Finance & Accounting 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.
Increasing wage structure of Ch2m Hill
– 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 Ch2m Hill.
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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ch2m Hill can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Ch2m Hill 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 Finance & Accounting industry regulations.
Shortening product life cycle
– it is one of the major threat that Ch2m Hill is facing in Finance & Accounting 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 Ch2m Hill business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ch2m Hill with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Ch2m Hill 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.
Environmental challenges
– Ch2m Hill 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. Ch2m Hill can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of CH2M Hill: A Private Firm in a Public World 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 CH2M Hill: A Private Firm in a Public World 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 CH2M Hill: A Private Firm in a Public World 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 CH2M Hill: A Private Firm in a Public World 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 CH2M Hill: A Private Firm in a Public World 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 Ch2m Hill needs to make to build a sustainable competitive advantage.