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 - – cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , technology disruption, increasing energy prices, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, 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 -
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.
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.
Analytics focus
– Engineering Centres 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 Rahul Chandra Sheel, Neharika Vohra 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.
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.
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.
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.
Sustainable margins compare to other players in Organizational Development industry
– Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) firm has clearly differentiated products in the market place. This has enabled Engineering Centres to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Engineering Centres to invest into research and development (R&D) and innovation.
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.
Highly skilled collaborators
– Engineering Centres 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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Effective Research and Development (R&D)
– Engineering Centres 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 Ingersoll Rand: Creating Effective Engineering and Technology Centres (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.
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 -
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.
Lack of clear differentiation of Engineering Centres products
– To increase the profitability and margins on the products, Engineering Centres needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Engineering Centres supply chain. Even after few cautionary changes mentioned in the HBR case study - Ingersoll Rand: Creating Effective Engineering and Technology Centres (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Engineering Centres vulnerable to further global disruptions in South East Asia.
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.
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.
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.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Rahul Chandra Sheel, Neharika Vohra suggests that, Engineering Centres 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.
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.
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 -
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Engineering Centres 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, Ingersoll Rand: Creating Effective Engineering and Technology Centres (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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Engineering Centres 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. Engineering Centres 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, Engineering Centres 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.
Better consumer reach
– The expansion of the 5G network will help Engineering Centres to increase its market reach. Engineering Centres will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ingersoll Rand: Creating Effective Engineering and Technology Centres (A), Engineering Centres may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
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.
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.
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.
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.
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.
Stagnating economy with rate increase
– Engineering Centres 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.
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.
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.
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.
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. Engineering Centres will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of 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.
