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 - – supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
Learning organization
- Offs Dimensions 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 Offs Dimensions is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Ability to lead change in Technology & Operations field
– Offs Dimensions 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 Offs Dimensions in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Diverse revenue streams
– Offs Dimensions is present in almost all the verticals within the industry. This has provided firm in Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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.
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.
Low bargaining power of suppliers
– Suppliers of Offs Dimensions in the sector have low bargaining power. Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Offs Dimensions to manage not only supply disruptions but also source products at highly competitive prices.
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.
Strong track record of project management
– Offs Dimensions is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 -
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.
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.
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.
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 operating costs
– Compare to the competitors, firm in the HBR case study Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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 Offs Dimensions 's lucrative customers.
Lack of clear differentiation of Offs Dimensions products
– To increase the profitability and margins on the products, Offs Dimensions needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
No frontier risks strategy
– After analyzing the HBR case study Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry, 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, Offs Dimensions is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry, is just above the industry average. Offs Dimensions 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 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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Offs Dimensions 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, Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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. Offs Dimensions 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. Offs Dimensions 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.
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.
Buying journey improvements
– Offs Dimensions can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Do Trade-offs Exist in Operations Strategy?: Insights from the Stamping Die Industry 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.
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.
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.
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.
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. Offs Dimensions can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Offs Dimensions to increase its market reach. Offs Dimensions 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.
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.
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.
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 -
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.
Consumer confidence and its impact on Offs Dimensions 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.
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 .
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.
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.
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.
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.
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.
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.
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.
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 .
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.
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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