Spir-it, Inc. (B): Managing People SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Spir-it, Inc. (B): Managing People
When Jack Sindler founded Spir-it, Inc. in 1934, he was the company's sole employee. By 1999, Sindler's firm more than survived its first 55 years. Employment was up to nearly 200, with facilities in two states and work done in three shifts. The product line--which had grown to 20,000 items grouped into 800 distinct product families--supported annual sales of $12.4 million. Richard Oedel, Spir-it's manager and then its owner in the 1980s and the 1990s, faced a number of challenges. These challenges extended beyond managing a product line that had grown increasingly varied, a customer base that had become increasingly diverse and dispersed, and a technological base that had grown to include a greater number of manufacturing processes. Spir-it's workforce had become increasingly international. Most employees spoke English as a second language, so supervisors had to be multilingual to be successful. Orders between the two locations were sometimes garbled, vacation policies were different, and health care and other benefit plans were subject to three different state laws, as were workers compensation and other state-specific programs. Oedel had to develop a human resources policy that effectively met the particular needs of his workforce and also effectively addressed the idiosyncratic situations that arose unexpectedly each day.
Swot Analysis of "Spir-it, Inc. (B): Managing People" written by Steven J. Spear includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Spir Oedel facing as an external strategic factors. Some of the topics covered in Spir-it, Inc. (B): Managing People case study are - Strategic Management Strategies, Diversity, Growth strategy, Human resource management, Manufacturing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Spir-it, Inc. (B): Managing People casestudy better are - – there is increasing trade war between United States & China, increasing energy prices, wage bills are increasing, supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Spir-it, Inc. (B): Managing People
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Spir-it, Inc. (B): Managing People case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Spir Oedel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Spir Oedel 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 Spir-it, Inc. (B): Managing People can be done for the following purposes –
1. Strategic planning using facts provided in Spir-it, Inc. (B): Managing People case study
2. Improving business portfolio management of Spir Oedel
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 Spir Oedel
Strengths Spir-it, Inc. (B): Managing People | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Spir Oedel in Spir-it, Inc. (B): Managing People Harvard Business Review case study are -
Organizational Resilience of Spir Oedel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Spir Oedel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Spir Oedel in the sector have low bargaining power. Spir-it, Inc. (B): Managing People has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Spir Oedel to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Spir Oedel 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 Spir Oedel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Spir-it, Inc. (B): Managing People Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Spir Oedel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Spir Oedel 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
– Spir Oedel is one of the leading recruiters in the industry. Managers in the Spir-it, Inc. (B): Managing People are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Technology & Operations field
– Spir Oedel 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 Spir Oedel in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Spir Oedel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Spir Oedel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Spir Oedel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Spir Oedel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Technology & Operations industry
– Spir-it, Inc. (B): Managing People firm has clearly differentiated products in the market place. This has enabled Spir Oedel to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Spir Oedel to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Spir Oedel 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.
Analytics focus
– Spir Oedel 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 Steven J. Spear can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Spir-it, Inc. (B): Managing People | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Spir-it, Inc. (B): Managing People are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Spir-it, Inc. (B): Managing People, it seems that the employees of Spir Oedel 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.
Lack of clear differentiation of Spir Oedel products
– To increase the profitability and margins on the products, Spir Oedel needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Spir Oedel 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Spir-it, Inc. (B): Managing People 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 Spir Oedel has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Spir-it, Inc. (B): Managing People, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Spir Oedel 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Spir-it, Inc. (B): Managing People has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Spir Oedel 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Spir Oedel 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 bargaining power of channel partners
– Because of the regulatory requirements, Steven J. Spear suggests that, Spir Oedel 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.
Interest costs
– Compare to the competition, Spir Oedel 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Spir-it, Inc. (B): Managing People, is just above the industry average. Spir Oedel 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.
Opportunities Spir-it, Inc. (B): Managing People | 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 Spir-it, Inc. (B): Managing People are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Spir Oedel can use these opportunities to build new business models that can help the communities that Spir Oedel operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Buying journey improvements
– Spir Oedel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Spir-it, Inc. (B): Managing People 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.
Using analytics as competitive advantage
– Spir Oedel 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 Spir-it, Inc. (B): Managing People - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Spir Oedel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Spir Oedel in the consumer business. Now Spir Oedel can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Spir Oedel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Spir Oedel 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.
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. Spir Oedel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Spir Oedel 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.
Developing new processes and practices
– Spir Oedel 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.
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 Spir Oedel 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Spir Oedel is facing challenges because of the dominance of functional experts in the organization. Spir-it, Inc. (B): Managing People 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.
Loyalty marketing
– Spir Oedel 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.
Learning at scale
– Online learning technologies has now opened space for Spir Oedel 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.
Threats Spir-it, Inc. (B): Managing People External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Spir-it, Inc. (B): Managing People are -
High dependence on third party suppliers
– Spir Oedel 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.
Regulatory challenges
– Spir Oedel 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.
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 Spir Oedel in the Technology & Operations sector and impact the bottomline of the organization.
Environmental challenges
– Spir Oedel 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. Spir Oedel can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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. Spir Oedel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Spir Oedel 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.
Technology acceleration in Forth Industrial Revolution
– Spir Oedel has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Spir Oedel 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.
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.
Shortening product life cycle
– it is one of the major threat that Spir Oedel is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Spir-it, Inc. (B): Managing People, Spir Oedel 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, Spir Oedel 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 Spir-it, Inc. (B): Managing People .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Spir Oedel 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.
Stagnating economy with rate increase
– Spir Oedel 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 Spir-it, Inc. (B): Managing People 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 Spir-it, Inc. (B): Managing People 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 Spir-it, Inc. (B): Managing People 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 Spir-it, Inc. (B): Managing People 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 Spir-it, Inc. (B): Managing People 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 Spir Oedel needs to make to build a sustainable competitive advantage.
