Transformation of Pratt & Whitney North Haven (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Transformation of Pratt & Whitney North Haven (A)
Pratt & Whitney is a leader in the development and manufacturing of gas turbine engines for commercial and military aircraft. Economic conditions for the airline and defense industries are forcing the airplane engine builders to restructure. Ed Northern, a new general manager of one of Pratt & Whitney's largest plants, is determined to transform the North Haven plant into a world-class manufacturing organization.
Authors :: H. Kent Bowen, Linda A. Hill, Andrew Burtis, Sylvie Ryckebusch
Topics :: Technology & Operations
Tags :: Business processes, Leadership, Leading teams, Manufacturing, Reorganization, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Transformation of Pratt & Whitney North Haven (A)" written by H. Kent Bowen, Linda A. Hill, Andrew Burtis, Sylvie Ryckebusch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pratt Whitney facing as an external strategic factors. Some of the topics covered in Transformation of Pratt & Whitney North Haven (A) case study are - Strategic Management Strategies, Business processes, Leadership, Leading teams, Manufacturing, Reorganization and Technology & Operations.
Some of the macro environment factors that can be used to understand the Transformation of Pratt & Whitney North Haven (A) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing commodity prices, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is backlash against globalization, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Transformation of Pratt & Whitney North Haven (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Transformation of Pratt & Whitney North Haven (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pratt Whitney, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pratt Whitney 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 Transformation of Pratt & Whitney North Haven (A) can be done for the following purposes –
1. Strategic planning using facts provided in Transformation of Pratt & Whitney North Haven (A) case study
2. Improving business portfolio management of Pratt Whitney
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 Pratt Whitney
Strengths Transformation of Pratt & Whitney North Haven (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pratt Whitney in Transformation of Pratt & Whitney North Haven (A) Harvard Business Review case study are -
High brand equity
– Pratt Whitney has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pratt Whitney to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Pratt Whitney 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.
Diverse revenue streams
– Pratt Whitney is present in almost all the verticals within the industry. This has provided firm in Transformation of Pratt & Whitney North Haven (A) 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.
Successful track record of launching new products
– Pratt Whitney has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pratt Whitney 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.
Training and development
– Pratt Whitney has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Transformation of Pratt & Whitney North Haven (A) 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.
Effective Research and Development (R&D)
– Pratt Whitney 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 Transformation of Pratt & Whitney North Haven (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Pratt Whitney in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Technology & Operations industry
– Transformation of Pratt & Whitney North Haven (A) firm has clearly differentiated products in the market place. This has enabled Pratt Whitney to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Pratt Whitney to invest into research and development (R&D) and innovation.
Organizational Resilience of Pratt Whitney
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pratt Whitney does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Pratt Whitney is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by H. Kent Bowen, Linda A. Hill, Andrew Burtis, Sylvie Ryckebusch can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the Transformation of Pratt & Whitney North Haven (A) 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.
Low bargaining power of suppliers
– Suppliers of Pratt Whitney in the sector have low bargaining power. Transformation of Pratt & Whitney North Haven (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pratt Whitney to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Transformation of Pratt & Whitney North Haven (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transformation of Pratt & Whitney North Haven (A) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Transformation of Pratt & Whitney North Haven (A) 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 Pratt Whitney has relatively successful track record of launching new products.
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 Pratt Whitney supply chain. Even after few cautionary changes mentioned in the HBR case study - Transformation of Pratt & Whitney North Haven (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pratt Whitney vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Transformation of Pratt & Whitney North Haven (A) HBR case study mentions - Pratt Whitney takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Pratt Whitney 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.
Lack of clear differentiation of Pratt Whitney products
– To increase the profitability and margins on the products, Pratt Whitney needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Pratt Whitney 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, Pratt Whitney 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 bargaining power of channel partners
– Because of the regulatory requirements, H. Kent Bowen, Linda A. Hill, Andrew Burtis, Sylvie Ryckebusch suggests that, Pratt Whitney 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.
No frontier risks strategy
– After analyzing the HBR case study Transformation of Pratt & Whitney North Haven (A), 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.
Increasing silos among functional specialists
– The organizational structure of Pratt Whitney is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Pratt Whitney needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pratt Whitney to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Transformation of Pratt & Whitney North Haven (A) 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 Transformation of Pratt & Whitney North Haven (A) can leverage the sales team experience to cultivate customer relationships as Pratt Whitney is planning to shift buying processes online.
Opportunities Transformation of Pratt & Whitney North Haven (A) | 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 Transformation of Pratt & Whitney North Haven (A) are -
Loyalty marketing
– Pratt Whitney 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.
Learning at scale
– Online learning technologies has now opened space for Pratt Whitney 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.
Manufacturing automation
– Pratt Whitney 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pratt Whitney can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pratt Whitney 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, Transformation of Pratt & Whitney North Haven (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Pratt Whitney 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.
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. Pratt Whitney can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pratt Whitney 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.
Buying journey improvements
– Pratt Whitney can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Transformation of Pratt & Whitney North Haven (A) 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.
Creating value in data economy
– The success of analytics program of Pratt Whitney has opened avenues for new revenue streams for the organization in the industry. This can help Pratt Whitney to build a more holistic ecosystem as suggested in the Transformation of Pratt & Whitney North Haven (A) case study. Pratt Whitney 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, Pratt Whitney can use these opportunities to build new business models that can help the communities that Pratt Whitney operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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 Pratt Whitney in the consumer business. Now Pratt Whitney can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pratt Whitney 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 Transformation of Pratt & Whitney North Haven (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Transformation of Pratt & Whitney North Haven (A) are -
Shortening product life cycle
– it is one of the major threat that Pratt Whitney is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Pratt Whitney business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Pratt Whitney has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Pratt Whitney 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 Transformation of Pratt & Whitney North Haven (A), Pratt Whitney 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 .
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. Pratt Whitney needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
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 Pratt Whitney.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pratt Whitney 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.
Consumer confidence and its impact on Pratt Whitney 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 Pratt Whitney
– 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 Pratt Whitney.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pratt Whitney with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Pratt Whitney 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.
Weighted SWOT Analysis of Transformation of Pratt & Whitney North Haven (A) 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 Transformation of Pratt & Whitney North Haven (A) 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 Transformation of Pratt & Whitney North Haven (A) 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 Transformation of Pratt & Whitney North Haven (A) 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 Transformation of Pratt & Whitney North Haven (A) 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 Pratt Whitney needs to make to build a sustainable competitive advantage.