IMPSA: Restructuring to Innovate with Existing Resources SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of IMPSA: Restructuring to Innovate with Existing Resources
In late 2012, an executive vice-president faced a dilemma at Industrias Metalurgicas Pescarmona S.A. (IMPSA), an Argentine multinational company that designed and produced cranes, dams, and components for power plants, and had recently begun building hydroelectric and wind power projects. The company's chief executive officer had tasked the executive vice-president with recommending how IMPSA could be radically restructured to adapt to changes in the world marketplace for renewable energy. However, IMPSA was at the top of its game, and the company had a backlog of orders valued at US$3.3 billion. The executive vice-president knew that the chief executive officer would not accept a minor reorganization but would demand a major restructuring based on the firm's existing resources, which was a strategy that, in the past, had proven to be successful for the company, particularly in emerging markets. The executive vice-president wondered how IMPSA could build on its existing wind power and hydroelectric dam business without abandoning the resources the firm had developed over the years. Daniel Friel is affiliated with Universidad de San Andres.
Swot Analysis of "IMPSA: Restructuring to Innovate with Existing Resources" written by Daniel Friel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Impsa Executive facing as an external strategic factors. Some of the topics covered in IMPSA: Restructuring to Innovate with Existing Resources case study are - Strategic Management Strategies, Mergers & acquisitions, Reorganization and Global Business.
Some of the macro environment factors that can be used to understand the IMPSA: Restructuring to Innovate with Existing Resources casestudy better are - – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, wage bills are increasing, increasing household debt because of falling income levels, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of IMPSA: Restructuring to Innovate with Existing Resources
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in IMPSA: Restructuring to Innovate with Existing Resources case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Impsa Executive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Impsa Executive 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 IMPSA: Restructuring to Innovate with Existing Resources can be done for the following purposes –
1. Strategic planning using facts provided in IMPSA: Restructuring to Innovate with Existing Resources case study
2. Improving business portfolio management of Impsa Executive
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 Impsa Executive
Strengths IMPSA: Restructuring to Innovate with Existing Resources | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Impsa Executive in IMPSA: Restructuring to Innovate with Existing Resources Harvard Business Review case study are -
Effective Research and Development (R&D)
– Impsa Executive 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 IMPSA: Restructuring to Innovate with Existing Resources - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Impsa Executive in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Impsa Executive is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Global Business field
– Impsa Executive 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 Impsa Executive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Impsa Executive is one of the leading recruiters in the industry. Managers in the IMPSA: Restructuring to Innovate with Existing Resources are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Impsa Executive has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Impsa Executive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Impsa Executive 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.
Innovation driven organization
– Impsa Executive is one of the most innovative firm in sector. Manager in IMPSA: Restructuring to Innovate with Existing Resources Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Impsa Executive 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 Daniel Friel 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.
Sustainable margins compare to other players in Global Business industry
– IMPSA: Restructuring to Innovate with Existing Resources firm has clearly differentiated products in the market place. This has enabled Impsa Executive to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Impsa Executive to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Impsa Executive has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Impsa Executive 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.
Highly skilled collaborators
– Impsa Executive 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 IMPSA: Restructuring to Innovate with Existing Resources HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses IMPSA: Restructuring to Innovate with Existing Resources | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of IMPSA: Restructuring to Innovate with Existing Resources are -
Lack of clear differentiation of Impsa Executive products
– To increase the profitability and margins on the products, Impsa Executive needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Impsa Executive 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.
Capital Spending Reduction
– Even during the low interest decade, Impsa Executive 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study IMPSA: Restructuring to Innovate with Existing Resources, is just above the industry average. Impsa Executive 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.
Skills based hiring
– The stress on hiring functional specialists at Impsa Executive 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study IMPSA: Restructuring to Innovate with Existing Resources, it seems that the employees of Impsa Executive 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Daniel Friel suggests that, Impsa Executive 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.
Increasing silos among functional specialists
– The organizational structure of Impsa Executive is dominated by functional specialists. It is not different from other players in the Global Business segment. Impsa Executive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Impsa Executive to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Impsa Executive is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study IMPSA: Restructuring to Innovate with Existing Resources can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study IMPSA: Restructuring to Innovate with Existing Resources 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 IMPSA: Restructuring to Innovate with Existing Resources can leverage the sales team experience to cultivate customer relationships as Impsa Executive is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the IMPSA: Restructuring to Innovate with Existing Resources HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Impsa Executive has relatively successful track record of launching new products.
Opportunities IMPSA: Restructuring to Innovate with Existing Resources | 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 IMPSA: Restructuring to Innovate with Existing Resources are -
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 Impsa Executive 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.
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. Impsa Executive 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. Impsa Executive 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.
Manufacturing automation
– Impsa Executive 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.
Building a culture of innovation
– managers at Impsa Executive 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.
Learning at scale
– Online learning technologies has now opened space for Impsa Executive 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.
Loyalty marketing
– Impsa Executive 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Impsa Executive can use these opportunities to build new business models that can help the communities that Impsa Executive operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Impsa Executive can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Impsa Executive can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. IMPSA: Restructuring to Innovate with Existing Resources 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Impsa Executive can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Impsa Executive 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 IMPSA: Restructuring to Innovate with Existing Resources - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Impsa Executive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Impsa Executive in the consumer business. Now Impsa Executive can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Impsa Executive 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, IMPSA: Restructuring to Innovate with Existing Resources, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats IMPSA: Restructuring to Innovate with Existing Resources External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study IMPSA: Restructuring to Innovate with Existing Resources are -
Technology acceleration in Forth Industrial Revolution
– Impsa Executive has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Impsa Executive 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 Impsa Executive 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 Impsa Executive with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Impsa Executive.
Shortening product life cycle
– it is one of the major threat that Impsa Executive is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Impsa Executive 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 IMPSA: Restructuring to Innovate with Existing Resources, Impsa Executive 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 .
Environmental challenges
– Impsa Executive 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. Impsa Executive can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Impsa Executive 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.
Consumer confidence and its impact on Impsa Executive 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.
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 Impsa Executive business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Impsa Executive 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.
Weighted SWOT Analysis of IMPSA: Restructuring to Innovate with Existing Resources 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 IMPSA: Restructuring to Innovate with Existing Resources 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 IMPSA: Restructuring to Innovate with Existing Resources 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 IMPSA: Restructuring to Innovate with Existing Resources 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 IMPSA: Restructuring to Innovate with Existing Resources 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 Impsa Executive needs to make to build a sustainable competitive advantage.