Swot Analysis of "Transformation of Pratt & Whitney North Haven (E)" 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 (E) case study are - Strategic Management Strategies, Reorganization and Technology & Operations.
Some of the macro environment factors that can be used to understand the Transformation of Pratt & Whitney North Haven (E) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing,
there is increasing trade war between United States & China, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Transformation of Pratt & Whitney North Haven (E)
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 (E) 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 (E) can be done for the following purposes –
1. Strategic planning using facts provided in Transformation of Pratt & Whitney North Haven (E) 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 (E) | 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 (E) Harvard Business Review case study are -
Strong track record of project management
– Pratt Whitney 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 Pratt Whitney in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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 (E) 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 (E) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– 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.
Sustainable margins compare to other players in Technology & Operations industry
– Transformation of Pratt & Whitney North Haven (E) 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.
Learning organization
- Pratt Whitney 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 Pratt Whitney is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Transformation of Pratt & Whitney North Haven (E) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Pratt Whitney is one of the leading recruiters in the industry. Managers in the Transformation of Pratt & Whitney North Haven (E) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Transformation of Pratt & Whitney North Haven (E) 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 Pratt Whitney digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pratt Whitney 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.
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.
Weaknesses Transformation of Pratt & Whitney North Haven (E) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transformation of Pratt & Whitney North Haven (E) are -
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.
Slow to strategic competitive environment developments
– As Transformation of Pratt & Whitney North Haven (E) 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.
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.
Skills based hiring
– The stress on hiring functional specialists at Pratt Whitney 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.
Products dominated business model
– Even though Pratt Whitney 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 - Transformation of Pratt & Whitney North Haven (E) should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Transformation of Pratt & Whitney North Haven (E), in the dynamic environment Pratt Whitney has struggled to respond to the nimble upstart competition. Pratt Whitney has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Pratt Whitney has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Transformation of Pratt & Whitney North Haven (E) 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.
Slow decision making process
– As mentioned earlier in the report, Pratt Whitney 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. Pratt Whitney 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.
Need for greater diversity
– Pratt Whitney 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.
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.
Opportunities Transformation of Pratt & Whitney North Haven (E) | 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 (E) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pratt Whitney is facing challenges because of the dominance of functional experts in the organization. Transformation of Pratt & Whitney North Haven (E) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pratt Whitney 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 Pratt Whitney to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Pratt Whitney 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.
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.
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.
Developing new processes and practices
– Pratt Whitney 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.
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.
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 (E) 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.
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.
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. Pratt Whitney 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. Pratt Whitney 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.
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.
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. Pratt Whitney can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Transformation of Pratt & Whitney North Haven (E) 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 (E) are -
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 Pratt Whitney in the Technology & Operations sector and impact the bottomline 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. Pratt Whitney can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 (E), 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 .
Regulatory challenges
– Pratt Whitney 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pratt Whitney 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 Transformation of Pratt & Whitney North Haven (E) .
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.
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.
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.
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. Pratt Whitney 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.
Environmental challenges
– Pratt Whitney 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. Pratt Whitney can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– 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.
Weighted SWOT Analysis of Transformation of Pratt & Whitney North Haven (E) 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 (E) 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 (E) 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 (E) 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 (E) 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.