Internationalization of Logset Oy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Internationalization of Logset Oy
Logset Oy (Logset) was a privately held, specialized forest-machine manufacturing firm in Koivulahti, Finland. The firm had a strong presence in Europe but not in North America. Canada, with 42 per cent of its land mass covered by forest, was an appealing market, although 15 years of effort had not resulted in any appreciable increase in sales there. Logset had a strong dealer network in Ontario and Quebec. However, efforts to recruit a dealer for Atlantic and Western Canada had been unsuccessful. What strategy should Logset use to enter into partnerships with Canadian companies? Bonita Russell is affiliated with Vancouver Island University. Cory Isaacs is affiliated with Seinajoki University of Applied Sciences.
Swot Analysis of "Internationalization of Logset Oy" written by Bonita Russell, Cory Isaacs includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Logset Oy facing as an external strategic factors. Some of the topics covered in Internationalization of Logset Oy case study are - Strategic Management Strategies, Marketing and Global Business.
Some of the macro environment factors that can be used to understand the Internationalization of Logset Oy casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing commodity prices, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Internationalization of Logset Oy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Internationalization of Logset Oy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Logset Oy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Logset Oy 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 Internationalization of Logset Oy can be done for the following purposes –
1. Strategic planning using facts provided in Internationalization of Logset Oy case study
2. Improving business portfolio management of Logset Oy
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 Logset Oy
Strengths Internationalization of Logset Oy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Logset Oy in Internationalization of Logset Oy Harvard Business Review case study are -
Organizational Resilience of Logset Oy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Logset Oy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Logset Oy is present in almost all the verticals within the industry. This has provided firm in Internationalization of Logset Oy 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.
Superior customer experience
– The customer experience strategy of Logset Oy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Logset Oy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Logset Oy 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.
Low bargaining power of suppliers
– Suppliers of Logset Oy in the sector have low bargaining power. Internationalization of Logset Oy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Logset Oy to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Logset Oy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Internationalization of Logset Oy 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.
Sustainable margins compare to other players in Global Business industry
– Internationalization of Logset Oy firm has clearly differentiated products in the market place. This has enabled Logset Oy to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Logset Oy to invest into research and development (R&D) and innovation.
Innovation driven organization
– Logset Oy is one of the most innovative firm in sector. Manager in Internationalization of Logset Oy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Logset Oy 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 Internationalization of Logset Oy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Global Business field
– Logset Oy 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 Logset Oy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Logset Oy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Logset Oy 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.
Strong track record of project management
– Logset Oy 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 Internationalization of Logset Oy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Internationalization of Logset Oy are -
Interest costs
– Compare to the competition, Logset Oy 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Internationalization of Logset Oy 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 Logset Oy 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Bonita Russell, Cory Isaacs suggests that, Logset Oy 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 Internationalization of Logset Oy, is just above the industry average. Logset Oy 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Logset Oy is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Internationalization of Logset Oy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Logset Oy 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Internationalization of Logset Oy, in the dynamic environment Logset Oy has struggled to respond to the nimble upstart competition. Logset Oy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Logset Oy, firm in the HBR case study Internationalization of Logset Oy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Logset Oy 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 - Internationalization of Logset Oy should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Logset Oy 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.
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 Logset Oy supply chain. Even after few cautionary changes mentioned in the HBR case study - Internationalization of Logset Oy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Logset Oy vulnerable to further global disruptions in South East Asia.
Opportunities Internationalization of Logset Oy | 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 Internationalization of Logset Oy are -
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 Logset Oy in the consumer business. Now Logset Oy can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Logset Oy 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.
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. Logset Oy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Logset Oy 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, Internationalization of Logset Oy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Logset Oy is facing challenges because of the dominance of functional experts in the organization. Internationalization of Logset Oy 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 Logset Oy 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.
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 Logset Oy 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Logset Oy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Logset Oy can use these opportunities to build new business models that can help the communities that Logset Oy operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Logset Oy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Logset Oy 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.
Better consumer reach
– The expansion of the 5G network will help Logset Oy to increase its market reach. Logset Oy 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Logset Oy 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 Logset Oy to hire the very best people irrespective of their geographical location.
Threats Internationalization of Logset Oy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Internationalization of Logset Oy are -
Shortening product life cycle
– it is one of the major threat that Logset Oy is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Logset Oy 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. Logset Oy can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Logset Oy in the Global Business sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Logset Oy 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Logset Oy 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.
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.
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. Logset Oy 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Logset Oy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Logset Oy business can come under increasing regulations regarding data privacy, data security, etc.
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. Logset Oy needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of Logset Oy
– 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 Logset Oy.
Technology acceleration in Forth Industrial Revolution
– Logset Oy has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Logset Oy 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.
Weighted SWOT Analysis of Internationalization of Logset Oy 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 Internationalization of Logset Oy 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 Internationalization of Logset Oy 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 Internationalization of Logset Oy 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 Internationalization of Logset Oy 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 Logset Oy needs to make to build a sustainable competitive advantage.
