CEO Spotlight: Staying Relevant in an Age of Transformation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of CEO Spotlight: Staying Relevant in an Age of Transformation
In a wide-ranging interview, the CEO of EstA?e Lauder Companies explains how he took the company from a market cap of $6 billion to $35 billion. He describes how he created new 'engines of growth' for the company through the diversification of its brands, categories, geographies and channels; the pros of working for a family-owned firm; why the company chooses to focus on its most discerning customers; and how he has engaged Millennials in creating company's forward-looking strategy.
Swot Analysis of "CEO Spotlight: Staying Relevant in an Age of Transformation" written by Fabrizio Freda, Karen Christensen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Esta Discerning facing as an external strategic factors. Some of the topics covered in CEO Spotlight: Staying Relevant in an Age of Transformation case study are - Strategic Management Strategies, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the CEO Spotlight: Staying Relevant in an Age of Transformation casestudy better are - – supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, wage bills are increasing,
increasing household debt because of falling income levels, technology disruption, etc
Introduction to SWOT Analysis of CEO Spotlight: Staying Relevant in an Age of Transformation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CEO Spotlight: Staying Relevant in an Age of Transformation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Esta Discerning, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Esta Discerning 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 CEO Spotlight: Staying Relevant in an Age of Transformation can be done for the following purposes –
1. Strategic planning using facts provided in CEO Spotlight: Staying Relevant in an Age of Transformation case study
2. Improving business portfolio management of Esta Discerning
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Esta Discerning
Strengths CEO Spotlight: Staying Relevant in an Age of Transformation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Esta Discerning in CEO Spotlight: Staying Relevant in an Age of Transformation Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– CEO Spotlight: Staying Relevant in an Age of Transformation firm has clearly differentiated products in the market place. This has enabled Esta Discerning to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Esta Discerning to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Esta Discerning is one of the leading recruiters in the industry. Managers in the CEO Spotlight: Staying Relevant in an Age of Transformation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Esta Discerning is present in almost all the verticals within the industry. This has provided firm in CEO Spotlight: Staying Relevant in an Age of Transformation 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.
Learning organization
- Esta Discerning 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 Esta Discerning is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in CEO Spotlight: Staying Relevant in an Age of Transformation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Esta Discerning 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 Esta Discerning in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Esta Discerning in the sector have low bargaining power. CEO Spotlight: Staying Relevant in an Age of Transformation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Esta Discerning to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Esta Discerning
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Esta Discerning does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Esta Discerning is one of the most innovative firm in sector. Manager in CEO Spotlight: Staying Relevant in an Age of Transformation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Esta Discerning 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 CEO Spotlight: Staying Relevant in an Age of Transformation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Esta Discerning has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in CEO Spotlight: Staying Relevant in an Age of Transformation 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.
Successful track record of launching new products
– Esta Discerning has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Esta Discerning 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Esta Discerning digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Esta Discerning 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.
Weaknesses CEO Spotlight: Staying Relevant in an Age of Transformation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CEO Spotlight: Staying Relevant in an Age of Transformation are -
Aligning sales with marketing
– It come across in the case study CEO Spotlight: Staying Relevant in an Age of Transformation 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 CEO Spotlight: Staying Relevant in an Age of Transformation can leverage the sales team experience to cultivate customer relationships as Esta Discerning is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study CEO Spotlight: Staying Relevant in an Age of Transformation, it seems that the employees of Esta Discerning don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Esta Discerning 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. Esta Discerning 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.
High cash cycle compare to competitors
Esta Discerning 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.
Interest costs
– Compare to the competition, Esta Discerning 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
– Esta Discerning 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.
Products dominated business model
– Even though Esta Discerning 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 - CEO Spotlight: Staying Relevant in an Age of Transformation should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Esta Discerning, firm in the HBR case study CEO Spotlight: Staying Relevant in an Age of Transformation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Esta Discerning 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.
Lack of clear differentiation of Esta Discerning products
– To increase the profitability and margins on the products, Esta Discerning needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Fabrizio Freda, Karen Christensen suggests that, Esta Discerning 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 CEO Spotlight: Staying Relevant in an Age of Transformation | 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 CEO Spotlight: Staying Relevant in an Age of Transformation are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Esta Discerning can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Esta Discerning can use these opportunities to build new business models that can help the communities that Esta Discerning operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Esta Discerning 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, Esta Discerning 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, CEO Spotlight: Staying Relevant in an Age of Transformation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Esta Discerning 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. Esta Discerning 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, Esta Discerning 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Esta Discerning in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Esta Discerning 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 Esta Discerning to hire the very best people irrespective of their geographical location.
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. Esta Discerning can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Esta Discerning 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.
Creating value in data economy
– The success of analytics program of Esta Discerning has opened avenues for new revenue streams for the organization in the industry. This can help Esta Discerning to build a more holistic ecosystem as suggested in the CEO Spotlight: Staying Relevant in an Age of Transformation case study. Esta Discerning can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Esta Discerning 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.
Developing new processes and practices
– Esta Discerning can develop new processes and procedures in Strategy & Execution 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.
Threats CEO Spotlight: Staying Relevant in an Age of Transformation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CEO Spotlight: Staying Relevant in an Age of Transformation are -
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 Esta Discerning.
Stagnating economy with rate increase
– Esta Discerning 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.
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. Esta Discerning needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Esta Discerning 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Esta Discerning 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 CEO Spotlight: Staying Relevant in an Age of Transformation .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study CEO Spotlight: Staying Relevant in an Age of Transformation, Esta Discerning may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Shortening product life cycle
– it is one of the major threat that Esta Discerning is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Esta Discerning 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. Esta Discerning can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Esta Discerning
– 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 Esta Discerning.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Esta Discerning 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 Esta Discerning in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Esta Discerning has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Esta Discerning needs to keep up with the evolution of technology in the Strategy & Execution 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.
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.
Weighted SWOT Analysis of CEO Spotlight: Staying Relevant in an Age of Transformation 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 CEO Spotlight: Staying Relevant in an Age of Transformation 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 CEO Spotlight: Staying Relevant in an Age of Transformation 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 CEO Spotlight: Staying Relevant in an Age of Transformation 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 CEO Spotlight: Staying Relevant in an Age of Transformation 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 Esta Discerning needs to make to build a sustainable competitive advantage.