Understanding the process of backsourcing: two cases of process and product backsourcing in Europe SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Understanding the process of backsourcing: two cases of process and product backsourcing in Europe
Backsourcing, defined generally as bringing services outsourced to a third party back in-house, is now a growing phenomenon. The decision to backsource has several significant implications for an organization, as it requires the organization to manage organizational change, reintegrate knowledge, and develop new capabilities and competences. Taking into account there is very limited empirical evidence of how to successfully accomplish the backsourcing process, two case studies included in this teaching case offer additional insight into the process of backsourcing. To prepare students for case analysis, this teaching case starts by describing the backsourcing phenomenon, followed by an overview of the backsourcing trend, and includes a brief review of the relevant literature that mainly focuses on backsourcing decisions and touches on critical success factors for implementing a backsourcing initiative. This is followed by two case studies that describe two essentially different examples of backsourcing. The first case study (MediaCorp) deals with the example of backsourcing IT hosting services, which is considered a business process, whereas the second case study (ITServCorp) talks about bringing an IT product development back in-house. However, regardless of the nature of the backsourced activity, analysis of these two cases allows deeper understanding of the process through which the backsourcing initiative has been implemented. Therefore, while each case can be used separately to analyze different aspects of backsourcing, they also can be analyzed in a comparative manner to better understand the process of backsourcing.
Swot Analysis of "Understanding the process of backsourcing: two cases of process and product backsourcing in Europe" written by Julia Kotlarsky, Lars Bognar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Backsourcing Process facing as an external strategic factors. Some of the topics covered in Understanding the process of backsourcing: two cases of process and product backsourcing in Europe case study are - Strategic Management Strategies, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Understanding the process of backsourcing: two cases of process and product backsourcing in Europe casestudy better are - – increasing government debt because of Covid-19 spendings, increasing energy prices, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Understanding the process of backsourcing: two cases of process and product backsourcing in Europe
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Understanding the process of backsourcing: two cases of process and product backsourcing in Europe case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Backsourcing Process, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Backsourcing Process 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe can be done for the following purposes –
1. Strategic planning using facts provided in Understanding the process of backsourcing: two cases of process and product backsourcing in Europe case study
2. Improving business portfolio management of Backsourcing Process
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 Backsourcing Process
Strengths Understanding the process of backsourcing: two cases of process and product backsourcing in Europe | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Backsourcing Process in Understanding the process of backsourcing: two cases of process and product backsourcing in Europe Harvard Business Review case study are -
Ability to recruit top talent
– Backsourcing Process is one of the leading recruiters in the industry. Managers in the Understanding the process of backsourcing: two cases of process and product backsourcing in Europe are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Backsourcing Process has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Backsourcing Process 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.
Analytics focus
– Backsourcing Process 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 Julia Kotlarsky, Lars Bognar 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.
Organizational Resilience of Backsourcing Process
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Backsourcing Process does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Backsourcing Process is present in almost all the verticals within the industry. This has provided firm in Understanding the process of backsourcing: two cases of process and product backsourcing in Europe case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Backsourcing Process has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Understanding the process of backsourcing: two cases of process and product backsourcing in Europe 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.
Superior customer experience
– The customer experience strategy of Backsourcing Process in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Backsourcing Process has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management
– Backsourcing Process is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Backsourcing Process 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Backsourcing Process digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Backsourcing Process 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.
Low bargaining power of suppliers
– Suppliers of Backsourcing Process in the sector have low bargaining power. Understanding the process of backsourcing: two cases of process and product backsourcing in Europe has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Backsourcing Process to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Understanding the process of backsourcing: two cases of process and product backsourcing in Europe | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Understanding the process of backsourcing: two cases of process and product backsourcing in Europe are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Understanding the process of backsourcing: two cases of process and product backsourcing in Europe, it seems that the employees of Backsourcing Process 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.
Aligning sales with marketing
– It come across in the case study Understanding the process of backsourcing: two cases of process and product backsourcing in Europe 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe can leverage the sales team experience to cultivate customer relationships as Backsourcing Process is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Backsourcing Process 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.
Increasing silos among functional specialists
– The organizational structure of Backsourcing Process is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Backsourcing Process needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Backsourcing Process to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Backsourcing Process 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. Backsourcing Process 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.
Interest costs
– Compare to the competition, Backsourcing Process 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.
Products dominated business model
– Even though Backsourcing Process 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 - Understanding the process of backsourcing: two cases of process and product backsourcing in Europe should strive to include more intangible value offerings along with its core products and services.
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 Backsourcing Process supply chain. Even after few cautionary changes mentioned in the HBR case study - Understanding the process of backsourcing: two cases of process and product backsourcing in Europe, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Backsourcing Process vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Backsourcing Process 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.
No frontier risks strategy
– After analyzing the HBR case study Understanding the process of backsourcing: two cases of process and product backsourcing in Europe, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Backsourcing Process is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Understanding the process of backsourcing: two cases of process and product backsourcing in Europe can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Understanding the process of backsourcing: two cases of process and product backsourcing in Europe | 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe are -
Using analytics as competitive advantage
– Backsourcing Process 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Backsourcing Process to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Backsourcing Process 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.
Buying journey improvements
– Backsourcing Process can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Understanding the process of backsourcing: two cases of process and product backsourcing in Europe 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.
Better consumer reach
– The expansion of the 5G network will help Backsourcing Process to increase its market reach. Backsourcing Process 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Backsourcing Process 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, Understanding the process of backsourcing: two cases of process and product backsourcing in Europe, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Backsourcing Process 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.
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 Backsourcing Process 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.
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. Backsourcing Process can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Backsourcing Process can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Backsourcing Process is facing challenges because of the dominance of functional experts in the organization. Understanding the process of backsourcing: two cases of process and product backsourcing in Europe 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, Backsourcing Process 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.
Leveraging digital technologies
– Backsourcing Process 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.
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. Backsourcing Process can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Understanding the process of backsourcing: two cases of process and product backsourcing in Europe External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Understanding the process of backsourcing: two cases of process and product backsourcing in Europe are -
Technology acceleration in Forth Industrial Revolution
– Backsourcing Process has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Backsourcing Process 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.
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. Backsourcing Process 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Backsourcing Process 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.
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 Backsourcing Process in the Technology & Operations sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Backsourcing Process is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Backsourcing Process.
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.
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 Backsourcing Process business can come under increasing regulations regarding data privacy, data security, 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe, Backsourcing Process 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Backsourcing Process with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Backsourcing Process 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.
Environmental challenges
– Backsourcing Process 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. Backsourcing Process can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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. Backsourcing Process needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Understanding the process of backsourcing: two cases of process and product backsourcing in Europe 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe 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 Understanding the process of backsourcing: two cases of process and product backsourcing in Europe 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 Backsourcing Process needs to make to build a sustainable competitive advantage.
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