Bergerac Systems: The Challenge of Backward Integration SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bergerac Systems: The Challenge of Backward Integration
Bergerac Systems is a small, rapidly growing manufacturer of diagnostic instruments used in veterinary practices. The company introduced the OmniVue chemistry analyzer, which enables veterinarians to run a wide range of blood and blood chemistry tests on their animal patients in the office instead of sending them to outside laboratories. OmniVue is easy to operate and produces highly reliable results using a proprietary cartridge for holding the blood specimen during the analysis. Sales of these single-use cartridges are an important part of the revenue stream for the product line. The firm relies on two outside suppliers for the plastic components of the cartridges. The CEO is concerned about inconsistent delivery from the cartridge suppliers which have resulted in shortages and stock-outs. To address the supply chain problems, the CEO considers acquiring one of the suppliers, GenieTech, while the director of planning proposes building the required capabilities within the company's existing manufacturing facilities. Students must perform a quantitative and qualitative analysis of a "make vs. buy" decision while considering expected production capacities, market forecasts, and the company's overall sourcing strategy.
Swot Analysis of "Bergerac Systems: The Challenge of Backward Integration" written by David A. Garvin, Sunru Yong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bergerac Omnivue facing as an external strategic factors. Some of the topics covered in Bergerac Systems: The Challenge of Backward Integration case study are - Strategic Management Strategies, Financial management, Manufacturing, Mergers & acquisitions, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Bergerac Systems: The Challenge of Backward Integration casestudy better are - – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
increasing energy prices, wage bills are increasing, etc
Introduction to SWOT Analysis of Bergerac Systems: The Challenge of Backward Integration
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bergerac Systems: The Challenge of Backward Integration case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bergerac Omnivue, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bergerac Omnivue 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 Bergerac Systems: The Challenge of Backward Integration can be done for the following purposes –
1. Strategic planning using facts provided in Bergerac Systems: The Challenge of Backward Integration case study
2. Improving business portfolio management of Bergerac Omnivue
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 Bergerac Omnivue
Strengths Bergerac Systems: The Challenge of Backward Integration | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bergerac Omnivue in Bergerac Systems: The Challenge of Backward Integration Harvard Business Review case study are -
Successful track record of launching new products
– Bergerac Omnivue has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bergerac Omnivue 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.
Ability to recruit top talent
– Bergerac Omnivue is one of the leading recruiters in the industry. Managers in the Bergerac Systems: The Challenge of Backward Integration are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Bergerac Omnivue in the sector have low bargaining power. Bergerac Systems: The Challenge of Backward Integration has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bergerac Omnivue to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Bergerac Omnivue 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 Bergerac Systems: The Challenge of Backward Integration HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– Bergerac Systems: The Challenge of Backward Integration firm has clearly differentiated products in the market place. This has enabled Bergerac Omnivue to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Bergerac Omnivue to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Bergerac Omnivue is present in almost all the verticals within the industry. This has provided firm in Bergerac Systems: The Challenge of Backward Integration 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Bergerac Omnivue digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bergerac Omnivue 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.
Strong track record of project management
– Bergerac Omnivue is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Bergerac Omnivue
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bergerac Omnivue does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Bergerac Omnivue is one of the most innovative firm in sector. Manager in Bergerac Systems: The Challenge of Backward Integration Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Bergerac Omnivue 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 David A. Garvin, Sunru Yong 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.
Learning organization
- Bergerac Omnivue is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Bergerac Omnivue is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bergerac Systems: The Challenge of Backward Integration Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Bergerac Systems: The Challenge of Backward Integration | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bergerac Systems: The Challenge of Backward Integration are -
Aligning sales with marketing
– It come across in the case study Bergerac Systems: The Challenge of Backward Integration 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 Bergerac Systems: The Challenge of Backward Integration can leverage the sales team experience to cultivate customer relationships as Bergerac Omnivue 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, Bergerac Omnivue is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bergerac Systems: The Challenge of Backward Integration can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Bergerac Omnivue 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.
Need for greater diversity
– Bergerac Omnivue 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, David A. Garvin, Sunru Yong suggests that, Bergerac Omnivue 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 Bergerac Systems: The Challenge of Backward Integration, in the dynamic environment Bergerac Omnivue has struggled to respond to the nimble upstart competition. Bergerac Omnivue has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Bergerac Systems: The Challenge of Backward Integration, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
High cash cycle compare to competitors
Bergerac Omnivue 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Bergerac Systems: The Challenge of Backward Integration, is just above the industry average. Bergerac Omnivue 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.
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 Bergerac Omnivue supply chain. Even after few cautionary changes mentioned in the HBR case study - Bergerac Systems: The Challenge of Backward Integration, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bergerac Omnivue vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Bergerac Omnivue products
– To increase the profitability and margins on the products, Bergerac Omnivue needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Bergerac Systems: The Challenge of Backward Integration | 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 Bergerac Systems: The Challenge of Backward Integration are -
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. Bergerac Omnivue 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. Bergerac Omnivue 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bergerac Omnivue 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, Bergerac Systems: The Challenge of Backward Integration, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bergerac Omnivue in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bergerac Omnivue 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 Bergerac Omnivue to hire the very best people irrespective of their geographical location.
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 Bergerac Omnivue 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.
Developing new processes and practices
– Bergerac Omnivue 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.
Leveraging digital technologies
– Bergerac Omnivue 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bergerac Omnivue can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bergerac Omnivue is facing challenges because of the dominance of functional experts in the organization. Bergerac Systems: The Challenge of Backward Integration 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.
Learning at scale
– Online learning technologies has now opened space for Bergerac Omnivue 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.
Creating value in data economy
– The success of analytics program of Bergerac Omnivue has opened avenues for new revenue streams for the organization in the industry. This can help Bergerac Omnivue to build a more holistic ecosystem as suggested in the Bergerac Systems: The Challenge of Backward Integration case study. Bergerac Omnivue can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Bergerac Omnivue can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bergerac Systems: The Challenge of Backward Integration 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.
Manufacturing automation
– Bergerac Omnivue 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.
Threats Bergerac Systems: The Challenge of Backward Integration External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bergerac Systems: The Challenge of Backward Integration are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bergerac Omnivue 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.
High dependence on third party suppliers
– Bergerac Omnivue 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.
Technology acceleration in Forth Industrial Revolution
– Bergerac Omnivue has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Bergerac Omnivue 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.
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 Bergerac Omnivue 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 Bergerac Omnivue with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bergerac Omnivue 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 Bergerac Systems: The Challenge of Backward Integration .
Shortening product life cycle
– it is one of the major threat that Bergerac Omnivue is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Bergerac Omnivue 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.
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.
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 Bergerac Omnivue in the Technology & Operations sector and impact the bottomline of the organization.
Increasing wage structure of Bergerac Omnivue
– 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 Bergerac Omnivue.
Consumer confidence and its impact on Bergerac Omnivue 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.
Stagnating economy with rate increase
– Bergerac Omnivue 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 Bergerac Systems: The Challenge of Backward Integration 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 Bergerac Systems: The Challenge of Backward Integration 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 Bergerac Systems: The Challenge of Backward Integration 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 Bergerac Systems: The Challenge of Backward Integration 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 Bergerac Systems: The Challenge of Backward Integration 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 Bergerac Omnivue needs to make to build a sustainable competitive advantage.