Case Study Description of Freqon--Buyer-Supplier Evolution?
Describes the relationship between Freqon, a producer of frequency converters, and NordAlu, a supplier of extruded aluminum components, over a period of 13 years. Shows how early successes were not sufficiently followed up by improvement efforts later on. Having achieved a substantial level of interaction, joint projects, and sales during the 1990s, by 2000 the relationship was almost back to its original state of limited joint interest and tension between the two companies. Was this just a natural evolution or could the two firms have gone on to a better joint working relationship? The description of the relationship is unique, as case writers rarely have the opportunity to access information for a period of more than 10 years. A winner of the 2002 DSI Best Case Study Award.
Authors :: Thomas E. Vollmann, Carlos Cordon, Chris Ellegaard
Swot Analysis of "Freqon--Buyer-Supplier Evolution?" written by Thomas E. Vollmann, Carlos Cordon, Chris Ellegaard includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Freqon Relationship facing as an external strategic factors. Some of the topics covered in Freqon--Buyer-Supplier Evolution? case study are - Strategic Management Strategies, Change management, Design, Joint ventures, Knowledge management, Manufacturing, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Freqon--Buyer-Supplier Evolution? casestudy better are - – talent flight as more people leaving formal jobs, wage bills are increasing, technology disruption, increasing commodity prices, increasing transportation and logistics costs, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Freqon--Buyer-Supplier Evolution?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Freqon--Buyer-Supplier Evolution? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Freqon Relationship, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Freqon Relationship 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 Freqon--Buyer-Supplier Evolution? can be done for the following purposes –
1. Strategic planning using facts provided in Freqon--Buyer-Supplier Evolution? case study
2. Improving business portfolio management of Freqon Relationship
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 Freqon Relationship
Strengths Freqon--Buyer-Supplier Evolution? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Freqon Relationship in Freqon--Buyer-Supplier Evolution? Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Freqon--Buyer-Supplier Evolution? 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.
Learning organization
- Freqon Relationship 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 Freqon Relationship is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Freqon--Buyer-Supplier Evolution? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Freqon Relationship in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Freqon Relationship is one of the most innovative firm in sector. Manager in Freqon--Buyer-Supplier Evolution? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Freqon Relationship in the sector have low bargaining power. Freqon--Buyer-Supplier Evolution? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Freqon Relationship to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Freqon Relationship is one of the leading recruiters in the industry. Managers in the Freqon--Buyer-Supplier Evolution? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Freqon Relationship has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Freqon Relationship to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Freqon Relationship has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Freqon--Buyer-Supplier Evolution? 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.
Organizational Resilience of Freqon Relationship
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Freqon Relationship does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Freqon Relationship 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.
Strong track record of project management
– Freqon Relationship is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Freqon Relationship has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Freqon Relationship 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.
Weaknesses Freqon--Buyer-Supplier Evolution? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Freqon--Buyer-Supplier Evolution? are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Freqon--Buyer-Supplier Evolution?, is just above the industry average. Freqon Relationship needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Lack of clear differentiation of Freqon Relationship products
– To increase the profitability and margins on the products, Freqon Relationship needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Freqon Relationship 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.
Skills based hiring
– The stress on hiring functional specialists at Freqon Relationship 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.
No frontier risks strategy
– After analyzing the HBR case study Freqon--Buyer-Supplier Evolution?, 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.
Need for greater diversity
– Freqon Relationship 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Freqon Relationship 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.
Products dominated business model
– Even though Freqon Relationship 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 - Freqon--Buyer-Supplier Evolution? should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Freqon Relationship has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Freqon--Buyer-Supplier Evolution?, in the dynamic environment Freqon Relationship has struggled to respond to the nimble upstart competition. Freqon Relationship 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 Freqon Relationship is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Freqon Relationship needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Freqon Relationship to focus more on services rather than just following the product oriented approach.
Opportunities Freqon--Buyer-Supplier Evolution? | 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 Freqon--Buyer-Supplier Evolution? are -
Developing new processes and practices
– Freqon Relationship 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.
Building a culture of innovation
– managers at Freqon Relationship 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.
Leveraging digital technologies
– Freqon Relationship 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 Freqon Relationship 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 Freqon Relationship to hire the very best people irrespective of their geographical location.
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 Freqon Relationship in the consumer business. Now Freqon Relationship can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Freqon Relationship can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Freqon Relationship can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Freqon Relationship 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.
Using analytics as competitive advantage
– Freqon Relationship 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 Freqon--Buyer-Supplier Evolution? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Freqon Relationship to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Freqon Relationship 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, Freqon--Buyer-Supplier Evolution?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Freqon Relationship can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Freqon Relationship can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Freqon--Buyer-Supplier Evolution? 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Freqon Relationship 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.
Threats Freqon--Buyer-Supplier Evolution? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Freqon--Buyer-Supplier Evolution? are -
High dependence on third party suppliers
– Freqon Relationship high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Freqon Relationship
– 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 Freqon Relationship.
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 Freqon Relationship in the Technology & Operations sector and impact the bottomline of the organization.
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. Freqon Relationship needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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. Freqon Relationship 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Freqon Relationship 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 Freqon--Buyer-Supplier Evolution? .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Freqon--Buyer-Supplier Evolution?, Freqon Relationship may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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. Freqon Relationship can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Freqon Relationship has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Freqon Relationship 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Freqon Relationship 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.
Regulatory challenges
– Freqon Relationship 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.
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 Freqon Relationship business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Freqon Relationship is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Freqon--Buyer-Supplier Evolution? 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 Freqon--Buyer-Supplier Evolution? 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 Freqon--Buyer-Supplier Evolution? 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 Freqon--Buyer-Supplier Evolution? 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 Freqon--Buyer-Supplier Evolution? 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 Freqon Relationship needs to make to build a sustainable competitive advantage.
