Case Study Description of Crown Equipment Corp.: Design Services Strategy
Chronicles three decades of a forklift truck company's industrial design strategy. Having grown rapidly from a small, pioneering niche-company to a leading, full-range, global producer, Crown is reevaluating its design services strategy. Discusses the company's long-term relationship with its design consultants and the pros and cons of establishing an in-house design department at this point in its history. Students need to decide whether Crown should opt for in-house design services, stay with its former design consultants, or look for new consultants.
Swot Analysis of "Crown Equipment Corp.: Design Services Strategy" written by Karen J. Freeze includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Design Crown facing as an external strategic factors. Some of the topics covered in Crown Equipment Corp.: Design Services Strategy case study are - Strategic Management Strategies, Design, Manufacturing, Marketing, Organizational structure, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Crown Equipment Corp.: Design Services Strategy casestudy better are - – 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%, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, technology disruption,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Crown Equipment Corp.: Design Services Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Crown Equipment Corp.: Design Services Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Design Crown, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Design Crown 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 Crown Equipment Corp.: Design Services Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Crown Equipment Corp.: Design Services Strategy case study
2. Improving business portfolio management of Design Crown
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 Design Crown
Strengths Crown Equipment Corp.: Design Services Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Design Crown in Crown Equipment Corp.: Design Services Strategy Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Design Crown 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.
Ability to lead change in Technology & Operations field
– Design Crown 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 Design Crown 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 Design Crown in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Design Crown in the sector have low bargaining power. Crown Equipment Corp.: Design Services Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Design Crown to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Design Crown 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 Crown Equipment Corp.: Design Services Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Design Crown 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 Crown Equipment Corp.: Design Services Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– Crown Equipment Corp.: Design Services Strategy firm has clearly differentiated products in the market place. This has enabled Design Crown to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Design Crown to invest into research and development (R&D) and innovation.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Design Crown digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Design Crown 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.
Training and development
– Design Crown has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Crown Equipment Corp.: Design Services Strategy 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.
High switching costs
– The high switching costs that Design Crown 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.
Learning organization
- Design Crown 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 Design Crown is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Crown Equipment Corp.: Design Services Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Design Crown has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Design Crown 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.
Weaknesses Crown Equipment Corp.: Design Services Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Crown Equipment Corp.: Design Services Strategy are -
High bargaining power of channel partners
– Because of the regulatory requirements, Karen J. Freeze suggests that, Design Crown 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, Design Crown is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Crown Equipment Corp.: Design Services Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Design Crown supply chain. Even after few cautionary changes mentioned in the HBR case study - Crown Equipment Corp.: Design Services Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Design Crown vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Crown Equipment Corp.: Design Services Strategy, 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.
Low market penetration in new markets
– Outside its home market of Design Crown, firm in the HBR case study Crown Equipment Corp.: Design Services Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Design Crown is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Design Crown needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Design Crown to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Crown Equipment Corp.: Design Services Strategy 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 Design Crown 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Design Crown 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.
Skills based hiring
– The stress on hiring functional specialists at Design Crown 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.
Slow decision making process
– As mentioned earlier in the report, Design Crown 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. Design Crown 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.
Lack of clear differentiation of Design Crown products
– To increase the profitability and margins on the products, Design Crown needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Crown Equipment Corp.: Design Services Strategy | 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 Crown Equipment Corp.: Design Services Strategy are -
Buying journey improvements
– Design Crown can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Crown Equipment Corp.: Design Services Strategy 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.
Loyalty marketing
– Design Crown 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.
Leveraging digital technologies
– Design Crown 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.
Using analytics as competitive advantage
– Design Crown 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 Crown Equipment Corp.: Design Services Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Design Crown to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Design Crown 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.
Building a culture of innovation
– managers at Design Crown 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Design Crown can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Design Crown can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Design Crown 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 Design Crown to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Design Crown to increase its market reach. Design Crown 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Design Crown 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Design Crown 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, Crown Equipment Corp.: Design Services Strategy, 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, Design Crown 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.
Threats Crown Equipment Corp.: Design Services Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Crown Equipment Corp.: Design Services Strategy are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Crown Equipment Corp.: Design Services Strategy, Design Crown 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 Design Crown with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Design Crown.
Environmental challenges
– Design Crown 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. Design Crown can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Design Crown business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Design Crown 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 Crown Equipment Corp.: Design Services Strategy .
Consumer confidence and its impact on Design Crown 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 wage structure of Design Crown
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Design Crown.
High dependence on third party suppliers
– Design Crown 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.
Shortening product life cycle
– it is one of the major threat that Design Crown is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Design Crown has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Design Crown 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.
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. Design Crown needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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. Design Crown 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 Crown Equipment Corp.: Design Services Strategy 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 Crown Equipment Corp.: Design Services Strategy 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 Crown Equipment Corp.: Design Services Strategy 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 Crown Equipment Corp.: Design Services Strategy 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 Crown Equipment Corp.: Design Services Strategy 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 Design Crown needs to make to build a sustainable competitive advantage.
