Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry
Must firms compete on all dimensions of value simultaneously? Or can managers pick and choose among market segments and deploy a variety of strategies to meet customer needs? Operational systems cannot simultaneously excel on all dimensions of value--cost, lead time, quality, and flexibility. The authors examine three companies similar in product, geographic location, shop floor equipment, employee skills, and customers; all three firms have survived for at least 20 years and are among the top 25 companies in their industry group. Comparing the three in terms of key strategic advantages, disadvantages, fixed costs, lead time, and employee commitment strongly supports the need to make trade-offs in competing dimensions of value in operations (although all three realize they must satisfy certain industry norms, such as quality and on-time delivery). Thus, not only do trade-offs exist, but they have significant competitive implications--trade-offs are strategic in nature. Eventually a firm hits the "productivity frontier," beyond which it cannot continue to improve all dimensions of performance simultaneously.
Authors :: Mark Pagell, Steve Melnyk, Robert B. Handfield
Swot Analysis of "Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry" written by Mark Pagell, Steve Melnyk, Robert B. Handfield includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Offs Dimensions facing as an external strategic factors. Some of the topics covered in Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry case study are - Strategic Management Strategies, Productivity and Technology & Operations.
Some of the macro environment factors that can be used to understand the Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry casestudy better are - – talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing commodity prices, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Offs Dimensions, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Offs Dimensions 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry can be done for the following purposes –
1. Strategic planning using facts provided in Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry case study
2. Improving business portfolio management of Offs Dimensions
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 Offs Dimensions
Strengths Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Offs Dimensions in Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Offs Dimensions in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Offs Dimensions digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Offs Dimensions 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.
Ability to recruit top talent
– Offs Dimensions is one of the leading recruiters in the industry. Managers in the Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Offs Dimensions
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Offs Dimensions does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Offs Dimensions is one of the most innovative firm in sector. Manager in Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Offs Dimensions 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Offs Dimensions has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Offs Dimensions to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Offs Dimensions are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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.
Highly skilled collaborators
– Offs Dimensions 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Offs Dimensions has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Offs Dimensions 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.
Sustainable margins compare to other players in Technology & Operations industry
– Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry firm has clearly differentiated products in the market place. This has enabled Offs Dimensions to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Offs Dimensions to invest into research and development (R&D) and innovation.
Weaknesses Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry are -
High bargaining power of channel partners
– Because of the regulatory requirements, Mark Pagell, Steve Melnyk, Robert B. Handfield suggests that, Offs Dimensions 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry, in the dynamic environment Offs Dimensions has struggled to respond to the nimble upstart competition. Offs Dimensions has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Offs Dimensions is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Offs Dimensions needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Offs Dimensions to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Offs Dimensions 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 - Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry, it seems that the employees of Offs Dimensions don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Offs Dimensions 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. Offs Dimensions 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.
Skills based hiring
– The stress on hiring functional specialists at Offs Dimensions 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.
Low market penetration in new markets
– Outside its home market of Offs Dimensions, firm in the HBR case study Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Offs Dimensions 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Offs Dimensions 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 cash cycle compare to competitors
Offs Dimensions 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.
Opportunities Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry | 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Offs Dimensions 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.
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. Offs Dimensions can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Offs Dimensions 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Offs Dimensions 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 Offs Dimensions to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Offs Dimensions 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.
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 Offs Dimensions in the consumer business. Now Offs Dimensions can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Offs Dimensions 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.
Learning at scale
– Online learning technologies has now opened space for Offs Dimensions 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.
Loyalty marketing
– Offs Dimensions 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Offs Dimensions is facing challenges because of the dominance of functional experts in the organization. Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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.
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 Offs Dimensions 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 Offs Dimensions has opened avenues for new revenue streams for the organization in the industry. This can help Offs Dimensions to build a more holistic ecosystem as suggested in the Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry case study. Offs Dimensions can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Offs Dimensions can use these opportunities to build new business models that can help the communities that Offs Dimensions operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry are -
Regulatory challenges
– Offs Dimensions 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.
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. Offs Dimensions can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Offs Dimensions 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry, Offs Dimensions 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 .
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.
Technology acceleration in Forth Industrial Revolution
– Offs Dimensions has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Offs Dimensions 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.
Environmental challenges
– Offs Dimensions 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. Offs Dimensions can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
High dependence on third party suppliers
– Offs Dimensions 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Offs Dimensions 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry .
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.
Stagnating economy with rate increase
– Offs Dimensions 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.
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 Offs Dimensions.
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. Offs Dimensions 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.
Weighted SWOT Analysis of Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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 Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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 Offs Dimensions needs to make to build a sustainable competitive advantage.
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