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A. Lange & Sohne SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of A. Lange & Sohne


The case describes how A. Lange & Sohne became one of world's leading watch companies. Its obsession with quality and innovation were behind its initial rise in the 19th century and, after a 40-year involuntary hiatus under the East German regime, again at the end of the 20th century. In 2016 its current CEO Wilhelm Schmid and the heads of product development and production have to decide on how to price its innovative watch collection and how to grow the Glashutte-based watchmaker.

Authors :: Stefan Thomke, Daniela Beyersdorfer

Topics :: Technology & Operations

Tags :: Growth strategy, Leadership, Manufacturing, Pricing, Product development, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "A. Lange & Sohne" written by Stefan Thomke, Daniela Beyersdorfer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sohne Lange facing as an external strategic factors. Some of the topics covered in A. Lange & Sohne case study are - Strategic Management Strategies, Growth strategy, Leadership, Manufacturing, Pricing, Product development and Technology & Operations.


Some of the macro environment factors that can be used to understand the A. Lange & Sohne casestudy better are - – increasing household debt because of falling income levels, increasing energy prices, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc



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Introduction to SWOT Analysis of A. Lange & Sohne


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in A. Lange & Sohne case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sohne Lange, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sohne Lange 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 A. Lange & Sohne can be done for the following purposes –
1. Strategic planning using facts provided in A. Lange & Sohne case study
2. Improving business portfolio management of Sohne Lange
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 Sohne Lange




Strengths A. Lange & Sohne | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Sohne Lange in A. Lange & Sohne Harvard Business Review case study are -

High switching costs

– The high switching costs that Sohne Lange 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.

Highly skilled collaborators

– Sohne Lange 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 A. Lange & Sohne HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Low bargaining power of suppliers

– Suppliers of Sohne Lange in the sector have low bargaining power. A. Lange & Sohne has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sohne Lange to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– Sohne Lange is present in almost all the verticals within the industry. This has provided firm in A. Lange & Sohne 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.

Effective Research and Development (R&D)

– Sohne Lange 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 A. Lange & Sohne - 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 recruit top talent

– Sohne Lange is one of the leading recruiters in the industry. Managers in the A. Lange & Sohne are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Strong track record of project management

– Sohne Lange is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

High brand equity

– Sohne Lange has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sohne Lange to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Innovation driven organization

– Sohne Lange is one of the most innovative firm in sector. Manager in A. Lange & Sohne Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Sustainable margins compare to other players in Technology & Operations industry

– A. Lange & Sohne firm has clearly differentiated products in the market place. This has enabled Sohne Lange to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Sohne Lange to invest into research and development (R&D) and innovation.

Learning organization

- Sohne Lange 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 Sohne Lange is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in A. Lange & Sohne Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Ability to lead change in Technology & Operations field

– Sohne Lange 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 Sohne Lange in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.






Weaknesses A. Lange & Sohne | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of A. Lange & Sohne are -

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 Sohne Lange supply chain. Even after few cautionary changes mentioned in the HBR case study - A. Lange & Sohne, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sohne Lange vulnerable to further global disruptions in South East Asia.

Workers concerns about automation

– As automation is fast increasing in the segment, Sohne Lange 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 A. Lange & Sohne 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 A. Lange & Sohne can leverage the sales team experience to cultivate customer relationships as Sohne Lange is planning to shift buying processes online.

Low market penetration in new markets

– Outside its home market of Sohne Lange, firm in the HBR case study A. Lange & Sohne needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Need for greater diversity

– Sohne Lange 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 A. Lange & Sohne 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 Sohne Lange has relatively successful track record of launching new products.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study A. Lange & Sohne, in the dynamic environment Sohne Lange has struggled to respond to the nimble upstart competition. Sohne Lange has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High bargaining power of channel partners

– Because of the regulatory requirements, Stefan Thomke, Daniela Beyersdorfer suggests that, Sohne Lange 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sohne Lange is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study A. Lange & Sohne can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Skills based hiring

– The stress on hiring functional specialists at Sohne Lange 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.

Lack of clear differentiation of Sohne Lange products

– To increase the profitability and margins on the products, Sohne Lange needs to provide more differentiated products than what it is currently offering in the marketplace.




Opportunities A. Lange & Sohne | 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 A. Lange & Sohne are -

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Sohne Lange can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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. Sohne Lange 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. Sohne Lange 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.

Loyalty marketing

– Sohne Lange 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.

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 Sohne Lange 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.

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 Sohne Lange in the consumer business. Now Sohne Lange can target international markets with far fewer capital restrictions requirements than the existing system.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Sohne Lange 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, A. Lange & Sohne, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Better consumer reach

– The expansion of the 5G network will help Sohne Lange to increase its market reach. Sohne Lange 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sohne Lange 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 Sohne Lange to hire the very best people irrespective of their geographical location.

Building a culture of innovation

– managers at Sohne Lange 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.

Manufacturing automation

– Sohne Lange can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Developing new processes and practices

– Sohne Lange 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.

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. Sohne Lange can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Sohne Lange is facing challenges because of the dominance of functional experts in the organization. A. Lange & Sohne 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.




Threats A. Lange & Sohne External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study A. Lange & Sohne are -

High dependence on third party suppliers

– Sohne Lange 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.

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. Sohne Lange can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Regulatory challenges

– Sohne Lange 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.

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 Sohne Lange business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Sohne Lange is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Environmental challenges

– Sohne Lange 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. Sohne Lange can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Sohne Lange 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 A. Lange & Sohne .

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. Sohne Lange 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.

Technology acceleration in Forth Industrial Revolution

– Sohne Lange has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Sohne Lange 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study A. Lange & Sohne, Sohne Lange 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 .

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Sohne Lange 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.

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.

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 Sohne Lange in the Technology & Operations sector and impact the bottomline of the organization.




Weighted SWOT Analysis of A. Lange & Sohne 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 A. Lange & Sohne 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 A. Lange & Sohne 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 A. Lange & Sohne 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 A. Lange & Sohne 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 Sohne Lange needs to make to build a sustainable competitive advantage.



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