Solid as Steel: Production Planning at thyssenkrupp SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Solid as Steel: Production Planning at thyssenkrupp
thyssenkrupp Steel Europe, a major European steel company, operates a so-called push-pickling line (PPL) in Bochum, Germany. The PPL produces a particular type of steel strips that are sold to B2B customers, mainly in the automotive industry. In spring 2014, a senior vice president of thyssenkrupp Steel's production operations and one of his production managers notice that over the span of ten years the production facility regularly did not meet its planned production volumes. They set out to determine the drivers for the deviations from planned production figures with the ultimate goal to improve the production planning process at the Bochum PPL. Students will step into the shoes of Markus Schulze-a production manager at thyssenkrupp Steel-as he searches for performance drivers at the Bochum PPL and analyzes recent production data to build a forecasting model for production planning.
Swot Analysis of "Solid as Steel: Production Planning at thyssenkrupp" written by Karl Schmedders, Markus Schulze includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Thyssenkrupp Ppl facing as an external strategic factors. Some of the topics covered in Solid as Steel: Production Planning at thyssenkrupp case study are - Strategic Management Strategies, Decision making, Design, Manufacturing, Performance measurement, Productivity, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Solid as Steel: Production Planning at thyssenkrupp casestudy better are - – supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing energy prices, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Solid as Steel: Production Planning at thyssenkrupp
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Solid as Steel: Production Planning at thyssenkrupp case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Thyssenkrupp Ppl, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Thyssenkrupp Ppl 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 Solid as Steel: Production Planning at thyssenkrupp can be done for the following purposes –
1. Strategic planning using facts provided in Solid as Steel: Production Planning at thyssenkrupp case study
2. Improving business portfolio management of Thyssenkrupp Ppl
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 Thyssenkrupp Ppl
Strengths Solid as Steel: Production Planning at thyssenkrupp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Thyssenkrupp Ppl in Solid as Steel: Production Planning at thyssenkrupp Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Thyssenkrupp Ppl 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.
Successful track record of launching new products
– Thyssenkrupp Ppl has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Thyssenkrupp Ppl 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.
Highly skilled collaborators
– Thyssenkrupp Ppl 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 Solid as Steel: Production Planning at thyssenkrupp HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Thyssenkrupp Ppl 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 Thyssenkrupp Ppl is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Solid as Steel: Production Planning at thyssenkrupp Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Thyssenkrupp Ppl has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Solid as Steel: Production Planning at thyssenkrupp 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.
High brand equity
– Thyssenkrupp Ppl has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Thyssenkrupp Ppl to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Thyssenkrupp Ppl in the sector have low bargaining power. Solid as Steel: Production Planning at thyssenkrupp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Thyssenkrupp Ppl to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Thyssenkrupp Ppl 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 Karl Schmedders, Markus Schulze 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.
Sustainable margins compare to other players in Technology & Operations industry
– Solid as Steel: Production Planning at thyssenkrupp firm has clearly differentiated products in the market place. This has enabled Thyssenkrupp Ppl to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Thyssenkrupp Ppl to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Thyssenkrupp Ppl is one of the leading recruiters in the industry. Managers in the Solid as Steel: Production Planning at thyssenkrupp 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
– Thyssenkrupp Ppl is one of the most innovative firm in sector. Manager in Solid as Steel: Production Planning at thyssenkrupp Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Thyssenkrupp Ppl is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Solid as Steel: Production Planning at thyssenkrupp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Solid as Steel: Production Planning at thyssenkrupp are -
Skills based hiring
– The stress on hiring functional specialists at Thyssenkrupp Ppl 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Solid as Steel: Production Planning at thyssenkrupp 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 Thyssenkrupp Ppl has relatively successful track record of launching new products.
Products dominated business model
– Even though Thyssenkrupp Ppl 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 - Solid as Steel: Production Planning at thyssenkrupp should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Thyssenkrupp Ppl is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Thyssenkrupp Ppl needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Thyssenkrupp Ppl to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Solid as Steel: Production Planning at thyssenkrupp HBR case study mentions - Thyssenkrupp Ppl takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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 Thyssenkrupp Ppl supply chain. Even after few cautionary changes mentioned in the HBR case study - Solid as Steel: Production Planning at thyssenkrupp, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Thyssenkrupp Ppl vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Solid as Steel: Production Planning at thyssenkrupp, it seems that the employees of Thyssenkrupp Ppl don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of Thyssenkrupp Ppl, firm in the HBR case study Solid as Steel: Production Planning at thyssenkrupp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Karl Schmedders, Markus Schulze suggests that, Thyssenkrupp Ppl 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.
Capital Spending Reduction
– Even during the low interest decade, Thyssenkrupp Ppl 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Thyssenkrupp Ppl needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Solid as Steel: Production Planning at thyssenkrupp | 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 Solid as Steel: Production Planning at thyssenkrupp are -
Using analytics as competitive advantage
– Thyssenkrupp Ppl 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 Solid as Steel: Production Planning at thyssenkrupp - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Thyssenkrupp Ppl to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Thyssenkrupp Ppl can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Solid as Steel: Production Planning at thyssenkrupp 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.
Learning at scale
– Online learning technologies has now opened space for Thyssenkrupp Ppl 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.
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. Thyssenkrupp Ppl 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. Thyssenkrupp Ppl 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Thyssenkrupp Ppl 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Thyssenkrupp Ppl 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 Thyssenkrupp Ppl can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Thyssenkrupp Ppl to increase its market reach. Thyssenkrupp Ppl will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Thyssenkrupp Ppl 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.
Loyalty marketing
– Thyssenkrupp Ppl 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Thyssenkrupp Ppl 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, Solid as Steel: Production Planning at thyssenkrupp, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Thyssenkrupp Ppl 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 Thyssenkrupp Ppl to hire the very best people irrespective of their geographical location.
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. Thyssenkrupp Ppl can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Solid as Steel: Production Planning at thyssenkrupp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Solid as Steel: Production Planning at thyssenkrupp are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Thyssenkrupp Ppl 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Thyssenkrupp Ppl 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 Solid as Steel: Production Planning at thyssenkrupp .
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. Thyssenkrupp Ppl needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Consumer confidence and its impact on Thyssenkrupp Ppl 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 Thyssenkrupp Ppl
– 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 Thyssenkrupp Ppl.
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
– Thyssenkrupp Ppl 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 Thyssenkrupp Ppl is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Solid as Steel: Production Planning at thyssenkrupp, Thyssenkrupp Ppl 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 .
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 Thyssenkrupp Ppl in the Technology & Operations sector and impact the bottomline of the organization.
Environmental challenges
– Thyssenkrupp Ppl 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. Thyssenkrupp Ppl can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 Thyssenkrupp Ppl business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Solid as Steel: Production Planning at thyssenkrupp 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 Solid as Steel: Production Planning at thyssenkrupp 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 Solid as Steel: Production Planning at thyssenkrupp 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 Solid as Steel: Production Planning at thyssenkrupp 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 Solid as Steel: Production Planning at thyssenkrupp 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 Thyssenkrupp Ppl needs to make to build a sustainable competitive advantage.