Smoothing the Procurement Process: Towards Better Contracting SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Smoothing the Procurement Process: Towards Better Contracting
In large, complex infrastructure projects, problems can arise from the common approaches of the public sector to contracting and award procedures. The rationale underlying contracts and award mechanisms of public procurement processes can lead to cost overruns and project delays. To avoid problems in the procurement of goods and services, the author analyzes the various factors at play with regard to contract types, incentives and the award process. He recommends four steps that both sides can take to optimize the benefits and mitigate the risks when negotiating a cost-plus contract between public buyers and private suppliers. The goal is to adopt greater flexibility and gain efficiency in the procurement process.
Swot Analysis of "Smoothing the Procurement Process: Towards Better Contracting" written by Steven Tadelis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Procurement Award facing as an external strategic factors. Some of the topics covered in Smoothing the Procurement Process: Towards Better Contracting case study are - Strategic Management Strategies, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the Smoothing the Procurement Process: Towards Better Contracting casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, wage bills are increasing,
increasing household debt because of falling income levels, increasing energy prices, etc
Introduction to SWOT Analysis of Smoothing the Procurement Process: Towards Better Contracting
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Smoothing the Procurement Process: Towards Better Contracting case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Procurement Award, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Procurement Award 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 Smoothing the Procurement Process: Towards Better Contracting can be done for the following purposes –
1. Strategic planning using facts provided in Smoothing the Procurement Process: Towards Better Contracting case study
2. Improving business portfolio management of Procurement Award
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Procurement Award
Strengths Smoothing the Procurement Process: Towards Better Contracting | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Procurement Award in Smoothing the Procurement Process: Towards Better Contracting Harvard Business Review case study are -
Effective Research and Development (R&D)
– Procurement Award 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 Smoothing the Procurement Process: Towards Better Contracting - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Procurement Award is present in almost all the verticals within the industry. This has provided firm in Smoothing the Procurement Process: Towards Better Contracting 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.
Cross disciplinary teams
– Horizontal connected teams at the Procurement Award 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
– Procurement Award is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Smoothing the Procurement Process: Towards Better Contracting 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.
Low bargaining power of suppliers
– Suppliers of Procurement Award in the sector have low bargaining power. Smoothing the Procurement Process: Towards Better Contracting has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Procurement Award to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Procurement Award 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 Procurement Award is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Smoothing the Procurement Process: Towards Better Contracting Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Global Business field
– Procurement Award 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 Procurement Award in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Procurement Award has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Smoothing the Procurement Process: Towards Better Contracting 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.
Highly skilled collaborators
– Procurement Award 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 Smoothing the Procurement Process: Towards Better Contracting HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Procurement Award has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Procurement Award 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.
Superior customer experience
– The customer experience strategy of Procurement Award in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Smoothing the Procurement Process: Towards Better Contracting | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Smoothing the Procurement Process: Towards Better Contracting are -
Capital Spending Reduction
– Even during the low interest decade, Procurement Award 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.
Products dominated business model
– Even though Procurement Award 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 - Smoothing the Procurement Process: Towards Better Contracting should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Smoothing the Procurement Process: Towards Better Contracting, it seems that the employees of Procurement Award 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Procurement Award is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Smoothing the Procurement Process: Towards Better Contracting can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Procurement Award supply chain. Even after few cautionary changes mentioned in the HBR case study - Smoothing the Procurement Process: Towards Better Contracting, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Procurement Award vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Smoothing the Procurement Process: Towards Better Contracting HBR case study mentions - Procurement Award 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.
Interest costs
– Compare to the competition, Procurement Award 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.
Lack of clear differentiation of Procurement Award products
– To increase the profitability and margins on the products, Procurement Award needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Procurement Award is dominated by functional specialists. It is not different from other players in the Global Business segment. Procurement Award needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Procurement Award to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Smoothing the Procurement Process: Towards Better Contracting, is just above the industry average. Procurement Award 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Procurement Award 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.
Opportunities Smoothing the Procurement Process: Towards Better Contracting | 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 Smoothing the Procurement Process: Towards Better Contracting are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Procurement Award is facing challenges because of the dominance of functional experts in the organization. Smoothing the Procurement Process: Towards Better Contracting 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Procurement Award 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 Procurement Award to increase its market reach. Procurement Award 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Procurement Award can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Procurement Award has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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 Procurement Award in the consumer business. Now Procurement Award can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Procurement Award can develop new processes and procedures in Global Business 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Procurement Award 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. Procurement Award 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.
Using analytics as competitive advantage
– Procurement Award 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 Smoothing the Procurement Process: Towards Better Contracting - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Procurement Award to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Procurement Award has opened avenues for new revenue streams for the organization in the industry. This can help Procurement Award to build a more holistic ecosystem as suggested in the Smoothing the Procurement Process: Towards Better Contracting case study. Procurement Award can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Procurement Award in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Procurement Award 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Procurement Award 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 Procurement Award to hire the very best people irrespective of their geographical location.
Threats Smoothing the Procurement Process: Towards Better Contracting External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Smoothing the Procurement Process: Towards Better Contracting are -
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 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.
Environmental challenges
– Procurement Award 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. Procurement Award can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Procurement Award.
Regulatory challenges
– Procurement Award 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 Global Business industry regulations.
Increasing wage structure of Procurement Award
– 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 Procurement Award.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Procurement Award 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 Smoothing the Procurement Process: Towards Better Contracting .
Consumer confidence and its impact on Procurement Award 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.
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. Procurement Award needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Procurement Award in the Global Business industry. The Global Business 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.
Technology acceleration in Forth Industrial Revolution
– Procurement Award has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Procurement Award needs to keep up with the evolution of technology in the Global Business 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.
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 Procurement Award in the Global Business sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Procurement Award with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Smoothing the Procurement Process: Towards Better Contracting 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 Smoothing the Procurement Process: Towards Better Contracting 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 Smoothing the Procurement Process: Towards Better Contracting 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 Smoothing the Procurement Process: Towards Better Contracting 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 Smoothing the Procurement Process: Towards Better Contracting 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 Procurement Award needs to make to build a sustainable competitive advantage.