Case Study Description of Cambridge Cooling Systems: Global Operations Strategy
The chief operating officer (CEO) at Cambridge Cooling Systems (CCS), an industrial cooling system manufacturer, has been asked for his recommendations on CCS's plants in Canada and Mexico. The company has had a reversal in its strategic plan in the past year and is shifting from a focus on growth to looking for operating efficiencies. CCS's global plants are running below full capacity, and opportunity exists to reduce costs through the consolidation of operations. The current focus is on Canada and Mexico, and the CEO is exploring moving custom work from Canada to Mexico, where labour and overhead rates are lower. The challenge for the CEO is to consider the implications of such a move. He needs to determine if it is economically preferable to move production to Mexico, and consider the implications of making changes to CCS's operations strategy.
Swot Analysis of "Cambridge Cooling Systems: Global Operations Strategy" written by P. Fraser Johnson, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ccs's Cooling facing as an external strategic factors. Some of the topics covered in Cambridge Cooling Systems: Global Operations Strategy case study are - Strategic Management Strategies, Manufacturing, Strategy and Technology & Operations.
Some of the macro environment factors that can be used to understand the Cambridge Cooling Systems: Global Operations Strategy casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc
Introduction to SWOT Analysis of Cambridge Cooling Systems: Global Operations Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cambridge Cooling Systems: Global Operations Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ccs's Cooling, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ccs's Cooling 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 Cambridge Cooling Systems: Global Operations Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Cambridge Cooling Systems: Global Operations Strategy case study
2. Improving business portfolio management of Ccs's Cooling
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ccs's Cooling
Strengths Cambridge Cooling Systems: Global Operations Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ccs's Cooling in Cambridge Cooling Systems: Global Operations Strategy Harvard Business Review case study are -
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Ccs's Cooling digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ccs's Cooling 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.
Analytics focus
– Ccs's Cooling 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 P. Fraser Johnson, Ken Mark 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 Ccs's Cooling 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.
Superior customer experience
– The customer experience strategy of Ccs's Cooling in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Technology & Operations industry
– Cambridge Cooling Systems: Global Operations Strategy firm has clearly differentiated products in the market place. This has enabled Ccs's Cooling to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Ccs's Cooling to invest into research and development (R&D) and innovation.
Innovation driven organization
– Ccs's Cooling is one of the most innovative firm in sector. Manager in Cambridge Cooling Systems: Global Operations Strategy 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 Technology & Operations field
– Ccs's Cooling 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 Ccs's Cooling in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Ccs's Cooling 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 Ccs's Cooling is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cambridge Cooling Systems: Global Operations Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Ccs's Cooling has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ccs's Cooling to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Ccs's Cooling 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 Cambridge Cooling Systems: Global Operations Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Ccs's Cooling in the sector have low bargaining power. Cambridge Cooling Systems: Global Operations Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ccs's Cooling to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Ccs's Cooling is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Cambridge Cooling Systems: Global Operations Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cambridge Cooling Systems: Global Operations Strategy are -
Low market penetration in new markets
– Outside its home market of Ccs's Cooling, firm in the HBR case study Cambridge Cooling Systems: Global Operations Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Cambridge Cooling Systems: Global Operations Strategy, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cambridge Cooling Systems: Global Operations Strategy, it seems that the employees of Ccs's Cooling 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.
Skills based hiring
– The stress on hiring functional specialists at Ccs's Cooling 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.
High bargaining power of channel partners
– Because of the regulatory requirements, P. Fraser Johnson, Ken Mark suggests that, Ccs's Cooling 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cambridge Cooling Systems: Global Operations Strategy, is just above the industry average. Ccs's Cooling 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.
Slow to strategic competitive environment developments
– As Cambridge Cooling Systems: Global Operations Strategy HBR case study mentions - Ccs's Cooling 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Cambridge Cooling Systems: Global Operations Strategy 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 Ccs's Cooling 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cambridge Cooling Systems: Global Operations Strategy, in the dynamic environment Ccs's Cooling has struggled to respond to the nimble upstart competition. Ccs's Cooling has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Ccs's Cooling supply chain. Even after few cautionary changes mentioned in the HBR case study - Cambridge Cooling Systems: Global Operations Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ccs's Cooling vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Ccs's Cooling is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Ccs's Cooling needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ccs's Cooling to focus more on services rather than just following the product oriented approach.
Opportunities Cambridge Cooling Systems: Global Operations Strategy | 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 Cambridge Cooling Systems: Global Operations Strategy are -
Buying journey improvements
– Ccs's Cooling can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cambridge Cooling Systems: Global Operations Strategy 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ccs's Cooling 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 Ccs's Cooling to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Ccs's Cooling to increase its market reach. Ccs's Cooling 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ccs's Cooling 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, Cambridge Cooling Systems: Global Operations Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Ccs's Cooling 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 Ccs's Cooling in the consumer business. Now Ccs's Cooling can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Ccs's Cooling can develop new processes and procedures in Technology & Operations 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 Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ccs's Cooling 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. Ccs's Cooling 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.
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 Ccs's Cooling 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ccs's Cooling is facing challenges because of the dominance of functional experts in the organization. Cambridge Cooling Systems: Global Operations Strategy 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ccs's Cooling in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
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. Ccs's Cooling can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ccs's Cooling 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.
Threats Cambridge Cooling Systems: Global Operations Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cambridge Cooling Systems: Global Operations Strategy are -
Shortening product life cycle
– it is one of the major threat that Ccs's Cooling is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ccs's Cooling in the Technology & Operations industry. The Technology & Operations 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
– Ccs's Cooling has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Ccs's Cooling needs to keep up with the evolution of technology in the Technology & Operations 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.
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 Ccs's Cooling business can come under increasing regulations regarding data privacy, data security, etc.
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 Ccs's Cooling.
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. Ccs's Cooling 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cambridge Cooling Systems: Global Operations Strategy, Ccs's Cooling may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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 Ccs's Cooling in the Technology & Operations sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Ccs's Cooling 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 dependence on third party suppliers
– Ccs's Cooling 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ccs's Cooling can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Ccs's Cooling needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Cambridge Cooling Systems: Global Operations Strategy 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 Cambridge Cooling Systems: Global Operations Strategy 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 Cambridge Cooling Systems: Global Operations Strategy 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 Cambridge Cooling Systems: Global Operations Strategy 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 Cambridge Cooling Systems: Global Operations Strategy 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 Ccs's Cooling needs to make to build a sustainable competitive advantage.