Finding the Path to Operational Excellence at ZENI SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Finding the Path to Operational Excellence at ZENI
The forestry industry unit (UFI) of ZENI, an important business area that carried out its own felling operation and featured high levels of investment in timber processing equipment and technology was run by one of the Founder son Patricio Zeni. Despite strong growth in recent years, UFI's profitability had gradually declined, partly due to the domestic economic situation which was marked by cost increases as a consequence of inflation between 15% to 20% annually, with an almost fixed exchange rate and, partly because the industry was becoming more globally competitive, prices in the USA market were set by two major competitors. Although internal operations seemed to run smoothly, General Manager of UFI -Patricio- was sure that better results in terms of profits could be achieved with more accurate diagnosis especially focus in production balance. The case explores whether UFI should implement a pull-based production planning system to improve company commercial performance and meet future demand or a push-based production system to maximize operational efficiency. Also, the case looks into the feasibility of implementing a control and monitoring system with operational indicators to reduce production problems. Finally, the case introduces the concern about the current organizational structure and how to reorganize the planning management function, possibly turning it into an independent area.
Authors :: Julio Sanchez-Loppacher, Maria Barale, Marcelo Pancotto
Swot Analysis of "Finding the Path to Operational Excellence at ZENI" written by Julio Sanchez-Loppacher, Maria Barale, Marcelo Pancotto includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ufi Zeni facing as an external strategic factors. Some of the topics covered in Finding the Path to Operational Excellence at ZENI case study are - Strategic Management Strategies, Managing organizations, Manufacturing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Finding the Path to Operational Excellence at ZENI casestudy better are - – supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing transportation and logistics costs, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, etc
Introduction to SWOT Analysis of Finding the Path to Operational Excellence at ZENI
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Finding the Path to Operational Excellence at ZENI case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ufi Zeni, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ufi Zeni 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 Finding the Path to Operational Excellence at ZENI can be done for the following purposes –
1. Strategic planning using facts provided in Finding the Path to Operational Excellence at ZENI case study
2. Improving business portfolio management of Ufi Zeni
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 Ufi Zeni
Strengths Finding the Path to Operational Excellence at ZENI | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ufi Zeni in Finding the Path to Operational Excellence at ZENI Harvard Business Review case study are -
High brand equity
– Ufi Zeni has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ufi Zeni to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Ufi Zeni 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.
Learning organization
- Ufi Zeni 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 Ufi Zeni is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Finding the Path to Operational Excellence at ZENI Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Ufi Zeni in the sector have low bargaining power. Finding the Path to Operational Excellence at ZENI has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ufi Zeni to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Ufi Zeni has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Finding the Path to Operational Excellence at ZENI - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Technology & Operations field
– Ufi Zeni is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ufi Zeni in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Ufi Zeni has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ufi Zeni 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.
Operational resilience
– The operational resilience strategy in the Finding the Path to Operational Excellence at ZENI 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.
Organizational Resilience of Ufi Zeni
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ufi Zeni does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Ufi Zeni 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 Finding the Path to Operational Excellence at ZENI HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Ufi Zeni is one of the most innovative firm in sector. Manager in Finding the Path to Operational Excellence at ZENI Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Ufi Zeni is one of the leading recruiters in the industry. Managers in the Finding the Path to Operational Excellence at ZENI are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Finding the Path to Operational Excellence at ZENI | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Finding the Path to Operational Excellence at ZENI are -
Interest costs
– Compare to the competition, Ufi Zeni 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
– Ufi Zeni 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Finding the Path to Operational Excellence at ZENI 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 Ufi Zeni has relatively successful track record of launching new products.
High cash cycle compare to competitors
Ufi Zeni 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ufi Zeni 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.
Aligning sales with marketing
– It come across in the case study Finding the Path to Operational Excellence at ZENI 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 Finding the Path to Operational Excellence at ZENI can leverage the sales team experience to cultivate customer relationships as Ufi Zeni is planning to shift buying processes online.
Lack of clear differentiation of Ufi Zeni products
– To increase the profitability and margins on the products, Ufi Zeni needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Julio Sanchez-Loppacher, Maria Barale, Marcelo Pancotto suggests that, Ufi Zeni 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Finding the Path to Operational Excellence at ZENI, it seems that the employees of Ufi Zeni 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.
Slow decision making process
– As mentioned earlier in the report, Ufi Zeni has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ufi Zeni even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
No frontier risks strategy
– After analyzing the HBR case study Finding the Path to Operational Excellence at ZENI, 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.
Opportunities Finding the Path to Operational Excellence at ZENI | 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 Finding the Path to Operational Excellence at ZENI are -
Creating value in data economy
– The success of analytics program of Ufi Zeni has opened avenues for new revenue streams for the organization in the industry. This can help Ufi Zeni to build a more holistic ecosystem as suggested in the Finding the Path to Operational Excellence at ZENI case study. Ufi Zeni can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Ufi Zeni 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.
Better consumer reach
– The expansion of the 5G network will help Ufi Zeni to increase its market reach. Ufi Zeni 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ufi Zeni is facing challenges because of the dominance of functional experts in the organization. Finding the Path to Operational Excellence at ZENI 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ufi Zeni 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.
Buying journey improvements
– Ufi Zeni can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Finding the Path to Operational Excellence at ZENI 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ufi Zeni 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, Finding the Path to Operational Excellence at ZENI, 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 Ufi Zeni 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.
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 Ufi Zeni in the consumer business. Now Ufi Zeni can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Ufi Zeni 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.
Using analytics as competitive advantage
– Ufi Zeni 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 Finding the Path to Operational Excellence at ZENI - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ufi Zeni to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Ufi Zeni 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. Ufi Zeni 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.
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 Ufi Zeni 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.
Threats Finding the Path to Operational Excellence at ZENI External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Finding the Path to Operational Excellence at ZENI are -
Environmental challenges
– Ufi Zeni 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. Ufi Zeni can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
High dependence on third party suppliers
– Ufi Zeni 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.
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 Ufi Zeni business can come under increasing regulations regarding data privacy, data security, etc.
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. Ufi Zeni 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.
Consumer confidence and its impact on Ufi Zeni 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.
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 Ufi Zeni in the Technology & Operations sector and impact the bottomline 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 Finding the Path to Operational Excellence at ZENI, Ufi Zeni 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ufi Zeni 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 Finding the Path to Operational Excellence at ZENI .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ufi Zeni with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Ufi Zeni can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Ufi Zeni needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
Increasing wage structure of Ufi Zeni
– 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 Ufi Zeni.
Weighted SWOT Analysis of Finding the Path to Operational Excellence at ZENI 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 Finding the Path to Operational Excellence at ZENI 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 Finding the Path to Operational Excellence at ZENI 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 Finding the Path to Operational Excellence at ZENI 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 Finding the Path to Operational Excellence at ZENI 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 Ufi Zeni needs to make to build a sustainable competitive advantage.
