Achieving Excellence in Global Sourcing SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Achieving Excellence in Global Sourcing
This is an MIT Sloan Management Review article. Global sourcing is an advanced but complex approach to sourcing and supply management. Uses survey research to gauge the extent to which companies are currently practicing global sourcing, which involves integrating and coordinating common items, materials, processes, technologies, designs, and suppliers across worldwide buying, design, and operating locations. In a sample consisting of supply executives primarily from large, North American-based multinationals, particularly manufacturers, the majority of survey respondents said their companies practice some form of international purchasing, a less integrated and coordinated approach than global sourcing. However, more than 70% of managers surveyed said that their companies plan to use global sourcing in the future. Identifies a set of features common among companies that excel at global sourcing: executive commitment to global sourcing; rigorous and well-defined global sourcing processes; availability of resources needed for the global sourcing initiative, including access to qualified personnel and budgets; information technology systems that support data analysis on a worldwide level; organizational design features that support the initiative, such as an executive committee that oversees global sourcing; structured approaches to communication, such as regular strategy review sessions; and methodologies for measuring savings from global sourcing.
Swot Analysis of "Achieving Excellence in Global Sourcing" written by Robert J. Trent, Robert M. Monczka includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sourcing Global facing as an external strategic factors. Some of the topics covered in Achieving Excellence in Global Sourcing case study are - Strategic Management Strategies, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Achieving Excellence in Global Sourcing casestudy better are - – increasing energy prices, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs,
there is backlash against globalization, wage bills are increasing, etc
Introduction to SWOT Analysis of Achieving Excellence in Global Sourcing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Achieving Excellence in Global Sourcing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sourcing Global, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sourcing Global 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 Achieving Excellence in Global Sourcing can be done for the following purposes –
1. Strategic planning using facts provided in Achieving Excellence in Global Sourcing case study
2. Improving business portfolio management of Sourcing Global
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 Sourcing Global
Strengths Achieving Excellence in Global Sourcing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sourcing Global in Achieving Excellence in Global Sourcing Harvard Business Review case study are -
Successful track record of launching new products
– Sourcing Global has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sourcing Global 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
– Sourcing Global is one of the leading recruiters in the industry. Managers in the Achieving Excellence in Global Sourcing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Sourcing Global in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Sourcing Global has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sourcing Global to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Sourcing Global is one of the most innovative firm in sector. Manager in Achieving Excellence in Global Sourcing Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Sourcing Global digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sourcing Global has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Operational resilience
– The operational resilience strategy in the Achieving Excellence in Global Sourcing 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.
Training and development
– Sourcing Global has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Achieving Excellence in Global Sourcing 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.
Highly skilled collaborators
– Sourcing Global 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 Achieving Excellence in Global Sourcing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Sourcing Global 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.
Low bargaining power of suppliers
– Suppliers of Sourcing Global in the sector have low bargaining power. Achieving Excellence in Global Sourcing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sourcing Global to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Sourcing Global 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 Achieving Excellence in Global Sourcing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Achieving Excellence in Global Sourcing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Achieving Excellence in Global Sourcing are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Achieving Excellence in Global Sourcing, it seems that the employees of Sourcing Global 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.
Capital Spending Reduction
– Even during the low interest decade, Sourcing Global 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 Achieving Excellence in Global Sourcing 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 Sourcing Global has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sourcing Global is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Achieving Excellence in Global Sourcing can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Sourcing Global products
– To increase the profitability and margins on the products, Sourcing Global needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Achieving Excellence in Global Sourcing, is just above the industry average. Sourcing Global needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Achieving Excellence in Global Sourcing 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 Sourcing Global 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Sourcing Global 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.
Products dominated business model
– Even though Sourcing Global 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 - Achieving Excellence in Global Sourcing should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Sourcing Global is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Sourcing Global needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sourcing Global to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Sourcing Global 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. Sourcing Global 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.
Opportunities Achieving Excellence in Global Sourcing | 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 Achieving Excellence in Global Sourcing are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sourcing Global 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 Sourcing Global to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Sourcing Global can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Achieving Excellence in Global Sourcing 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.
Leveraging digital technologies
– Sourcing Global 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.
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. Sourcing Global can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Sourcing Global in the consumer business. Now Sourcing Global can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sourcing Global 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.
Learning at scale
– Online learning technologies has now opened space for Sourcing Global 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sourcing Global can use these opportunities to build new business models that can help the communities that Sourcing Global operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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 Sourcing Global 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.
Creating value in data economy
– The success of analytics program of Sourcing Global has opened avenues for new revenue streams for the organization in the industry. This can help Sourcing Global to build a more holistic ecosystem as suggested in the Achieving Excellence in Global Sourcing case study. Sourcing Global can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Sourcing Global 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.
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. Sourcing Global 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. Sourcing Global 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.
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. Sourcing Global can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Achieving Excellence in Global Sourcing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Achieving Excellence in Global Sourcing are -
Consumer confidence and its impact on Sourcing Global 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.
Environmental challenges
– Sourcing Global 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. Sourcing Global 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 Sourcing Global business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Sourcing Global 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sourcing Global 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 Achieving Excellence in Global Sourcing .
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Sourcing Global.
High dependence on third party suppliers
– Sourcing Global 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Achieving Excellence in Global Sourcing, Sourcing Global 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 .
Stagnating economy with rate increase
– Sourcing Global 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.
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. Sourcing Global 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sourcing Global 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.
Weighted SWOT Analysis of Achieving Excellence in Global Sourcing 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 Achieving Excellence in Global Sourcing 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 Achieving Excellence in Global Sourcing 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 Achieving Excellence in Global Sourcing 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 Achieving Excellence in Global Sourcing 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 Sourcing Global needs to make to build a sustainable competitive advantage.
