Case Study Description of Ingersoll Rand: Creating Effective Engineering and Technology Centres (A)
In 2012, Ingersoll Rand India added the position of senior director of engineering for its engineering and technology centres, which were originally established to support the product development activities of the company. The new position was established to lead the currently low-performing engineering and technology centres to a new, more efficient and effective path. Projects had been missing their delivery targets, and there were major differences in the understanding of the requirements among the strategic business unit teams. This all led to continuous changes in deliverables and resulted in customer dissatisfaction. Key employees were unhappy, and some high-performing team members had left the organization. The new senior director of engineering needed to assess the situation and determine whether he had the right organizational configuration to grow and sustain the engineering for its engineering and technology centres in Ingersoll Rand India. The case comprises two parts: Part A describes the challenges faced by the organization overall, and Part B discusses the progress between 2012 and 2015. Rahul Chandra Sheel is affiliated with XLRI-Xavier School of Management. Neharika Vohra is affiliated with Indian Institute of Management Ahmedabad.
Swot Analysis of "Ingersoll Rand: Creating Effective Engineering and Technology Centres (A)" written by Rahul Chandra Sheel, Neharika Vohra includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Engineering Centres facing as an external strategic factors. Some of the topics covered in Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) case study are - Strategic Management Strategies, Design, Manufacturing, Talent management and Organizational Development.
Some of the macro environment factors that can be used to understand the Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) casestudy better are - – geopolitical disruptions, increasing household debt because of falling income levels, increasing commodity prices, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Ingersoll Rand: Creating Effective Engineering and Technology Centres (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Engineering Centres, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Engineering Centres 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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) can be done for the following purposes –
1. Strategic planning using facts provided in Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) case study
2. Improving business portfolio management of Engineering Centres
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Engineering Centres
Strengths Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Engineering Centres in Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) Harvard Business Review case study are -
Ability to recruit top talent
– Engineering Centres is one of the leading recruiters in the industry. Managers in the Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) 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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (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.
Organizational Resilience of Engineering Centres
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Engineering Centres does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Engineering Centres digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Engineering Centres has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to lead change in Organizational Development field
– Engineering Centres 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 Engineering Centres in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Engineering Centres is one of the most innovative firm in sector. Manager in Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Engineering Centres 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 Engineering Centres is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Engineering Centres in the sector have low bargaining power. Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Engineering Centres to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Engineering Centres has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Engineering Centres 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.
Cross disciplinary teams
– Horizontal connected teams at the Engineering Centres are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Engineering Centres 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 Engineering Centres in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) are -
Slow decision making process
– As mentioned earlier in the report, Engineering Centres 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. Engineering Centres 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ingersoll Rand: Creating Effective Engineering and Technology Centres (A), in the dynamic environment Engineering Centres has struggled to respond to the nimble upstart competition. Engineering Centres has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Engineering Centres 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, Engineering Centres 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Ingersoll Rand: Creating Effective Engineering and Technology Centres (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 Engineering Centres has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ingersoll Rand: Creating Effective Engineering and Technology Centres (A), is just above the industry average. Engineering Centres 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.
Products dominated business model
– Even though Engineering Centres 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 - Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Ingersoll Rand: Creating Effective Engineering and Technology Centres (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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) can leverage the sales team experience to cultivate customer relationships as Engineering Centres is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Engineering Centres 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.
Interest costs
– Compare to the competition, Engineering Centres 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.
Need for greater diversity
– Engineering Centres 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.
Opportunities Ingersoll Rand: Creating Effective Engineering and Technology Centres (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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) are -
Developing new processes and practices
– Engineering Centres can develop new processes and procedures in Organizational Development 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Engineering Centres can use these opportunities to build new business models that can help the communities that Engineering Centres operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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. Engineering Centres can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Engineering Centres has opened avenues for new revenue streams for the organization in the industry. This can help Engineering Centres to build a more holistic ecosystem as suggested in the Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) case study. Engineering Centres can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Engineering Centres can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Engineering Centres 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.
Leveraging digital technologies
– Engineering Centres 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.
Building a culture of innovation
– managers at Engineering Centres 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 Organizational Development segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Engineering Centres in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Buying journey improvements
– Engineering Centres can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ingersoll Rand: Creating Effective Engineering and Technology Centres (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.
Using analytics as competitive advantage
– Engineering Centres 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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Engineering Centres to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Engineering Centres is facing challenges because of the dominance of functional experts in the organization. Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) 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.
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 Engineering Centres 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.
Threats Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) are -
Increasing wage structure of Engineering Centres
– 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 Engineering Centres.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Engineering Centres in the Organizational Development industry. The Organizational Development 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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Engineering Centres can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Engineering Centres 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 Organizational Development industry regulations.
Shortening product life cycle
– it is one of the major threat that Engineering Centres is facing in Organizational Development 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 Engineering Centres business can come under increasing regulations regarding data privacy, data security, etc.
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.
Environmental challenges
– Engineering Centres 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. Engineering Centres can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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. Engineering Centres needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Engineering Centres with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Engineering Centres in the Organizational Development sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Engineering Centres 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.
Consumer confidence and its impact on Engineering Centres 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.
Weighted SWOT Analysis of Ingersoll Rand: Creating Effective Engineering and Technology Centres (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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (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 Engineering Centres needs to make to build a sustainable competitive advantage.