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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, wage bills are increasing, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
geopolitical disruptions, there is backlash against globalization, 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.
Analytics focus
– Procurement Award 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 Steven Tadelis 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.
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.
Organizational Resilience of Procurement Award
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Procurement Award does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Procurement Award digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Procurement Award 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.
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.
Ability to recruit top talent
– Procurement Award is one of the leading recruiters in the industry. Managers in the Smoothing the Procurement Process: Towards Better Contracting 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 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.
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.
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.
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.
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 -
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.
Aligning sales with marketing
– It come across in the case study Smoothing the Procurement Process: Towards Better Contracting 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 Smoothing the Procurement Process: Towards Better Contracting can leverage the sales team experience to cultivate customer relationships as Procurement Award is planning to shift buying processes online.
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.
Slow decision making process
– As mentioned earlier in the report, Procurement Award 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. Procurement Award 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.
Low market penetration in new markets
– Outside its home market of Procurement Award, firm in the HBR case study Smoothing the Procurement Process: Towards Better Contracting needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Smoothing the Procurement Process: Towards Better Contracting, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
High cash cycle compare to competitors
Procurement Award 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Smoothing the Procurement Process: Towards Better Contracting has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Procurement Award 's lucrative customers.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Procurement Award 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.
Manufacturing automation
– Procurement Award can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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.
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. Procurement Award 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, Procurement Award can use these opportunities to build new business models that can help the communities that Procurement Award operates in. Secondly it can use opportunities from government spending in Global Business sector.
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 Procurement Award 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.
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.
Building a culture of innovation
– managers at Procurement Award 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 Global Business segment.
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.
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 -
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.
High dependence on third party suppliers
– Procurement Award 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 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.
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 .
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.
Shortening product life cycle
– it is one of the major threat that Procurement Award is facing in Global Business 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 Procurement Award business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Procurement Award 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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Smoothing the Procurement Process: Towards Better Contracting, Procurement Award may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.