Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System
Formed in late 1996, Boeing Australia Ltd. (BAL) was a relatively new company and a global extension of the U.S. firm, the Boeing Co. BAL developed capabilities in the areas of space and communications, site management, and the upgrade and maintenance of military aircraft and equipment. As BAL grew, so did the legacy information system it used for both internal communications and external dealings with customers. BAL, however, faced difficult decisions as it sought to upgrade its procurement systems and processes to improve operations. In early 1999, BAL recruited a new national procurement manager, Russell Menere, whose immediate task was to look for gains in productivity by improving procurement processes, either through cost savings or by reduced processing time. To meet this objective, Menere initiated a number of short-term improvements. These included the rationalization of a large number of BAL's suppliers, improving BAL's relationships with its key suppliers; the introduction of a credit-card purchasing system for low-value, large-volume consumables; and the adoption of electronic ordering processes with BAL's larger suppliers. In 2002, with new opportunities available through e-business technology, Menere needed to decide what BAL's next step should be. Should BAL invest in a new system that would simplify the procurement process across different divisions and support complex interfaces with suppliers? Should BAL continue to sit on the fence and seek short-term improvement tools for integration with its existing legacy systems?
Swot Analysis of "Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System" written by Ali Farhoomand, Peta Ashworth includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bal Bal's facing as an external strategic factors. Some of the topics covered in Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System case study are - Strategic Management Strategies, IT and Technology & Operations.
Some of the macro environment factors that can be used to understand the Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System casestudy better are - – technology disruption, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bal Bal's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bal Bal's 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System can be done for the following purposes –
1. Strategic planning using facts provided in Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System case study
2. Improving business portfolio management of Bal Bal's
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 Bal Bal's
Strengths Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bal Bal's in Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System Harvard Business Review case study are -
Diverse revenue streams
– Bal Bal's is present in almost all the verticals within the industry. This has provided firm in Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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.
Analytics focus
– Bal Bal's 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 Ali Farhoomand, Peta Ashworth 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.
Highly skilled collaborators
– Bal Bal's 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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
– Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System firm has clearly differentiated products in the market place. This has enabled Bal Bal's to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Bal Bal's to invest into research and development (R&D) and innovation.
Ability to lead change in Technology & Operations field
– Bal Bal's 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 Bal Bal's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Bal Bal's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Bal Bal's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Bal Bal's 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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.
Learning organization
- Bal Bal's 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 Bal Bal's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Bal Bal's 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.
Low bargaining power of suppliers
– Suppliers of Bal Bal's in the sector have low bargaining power. Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bal Bal's to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System are -
Low market penetration in new markets
– Outside its home market of Bal Bal's, firm in the HBR case study Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Bal Bal's 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.
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 Bal Bal's supply chain. Even after few cautionary changes mentioned in the HBR case study - Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bal Bal's vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Bal Bal's 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.
No frontier risks strategy
– After analyzing the HBR case study Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System, 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.
Products dominated business model
– Even though Bal Bal's 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 - Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System HBR case study mentions - Bal Bal's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System, is just above the industry average. Bal Bal's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System, in the dynamic environment Bal Bal's has struggled to respond to the nimble upstart competition. Bal Bal's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Bal Bal's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Bal Bal's products
– To increase the profitability and margins on the products, Bal Bal's needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System | 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Bal Bal's 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. Bal Bal's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Bal Bal's has opened avenues for new revenue streams for the organization in the industry. This can help Bal Bal's to build a more holistic ecosystem as suggested in the Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System case study. Bal Bal's can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Bal Bal's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bal Bal's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Bal Bal's 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bal Bal's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Bal Bal's 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, Bal Bal's is facing challenges because of the dominance of functional experts in the organization. Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bal Bal's 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, Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Bal Bal's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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.
Building a culture of innovation
– managers at Bal Bal's 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.
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 Bal Bal's 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.
Manufacturing automation
– Bal Bal's 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.
Threats Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System are -
Increasing wage structure of Bal Bal's
– 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 Bal Bal's.
Environmental challenges
– Bal Bal's 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. Bal Bal's 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 Bal Bal's.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System, Bal Bal's 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 .
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. Bal Bal's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bal Bal's 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System .
Technology acceleration in Forth Industrial Revolution
– Bal Bal's has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Bal Bal's 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.
Stagnating economy with rate increase
– Bal Bal's 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.
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.
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. Bal Bal's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Bal Bal's in the Technology & Operations sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bal Bal's 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.
High dependence on third party suppliers
– Bal Bal's 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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 Boeing Australia Ltd.: Assessing the Merits of Implementing a Sophisticated e-Procurement System 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 Bal Bal's needs to make to build a sustainable competitive advantage.
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