John Deere Reman: Creating Value Through Reverse Logistics SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of John Deere Reman: Creating Value Through Reverse Logistics
The factory manager of John Deere Reman, located in Edmonton, Canada, was preparing for a meeting in September 2017, with the general manager of Global Reman Operations and Marketing at the company's head office in Springfield, Missouri. John Deere's remanufacturing operations had been steadily improving over the last decade. The purpose of the meeting was to discuss opportunities for changes to John Deere's remanufacturing operation that would provide value to the company, improve customer service, and support the company's commitment to environmental sustainability.
Swot Analysis of "John Deere Reman: Creating Value Through Reverse Logistics" written by P. Fraser Johnson, R. Chandrasekhar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Reman Deere's facing as an external strategic factors. Some of the topics covered in John Deere Reman: Creating Value Through Reverse Logistics case study are - Strategic Management Strategies, Supply chain, Sustainability and Technology & Operations.
Some of the macro environment factors that can be used to understand the John Deere Reman: Creating Value Through Reverse Logistics casestudy better are - – digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing energy prices, geopolitical disruptions, there is backlash against globalization,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of John Deere Reman: Creating Value Through Reverse Logistics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in John Deere Reman: Creating Value Through Reverse Logistics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reman Deere's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reman Deere's 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 John Deere Reman: Creating Value Through Reverse Logistics can be done for the following purposes –
1. Strategic planning using facts provided in John Deere Reman: Creating Value Through Reverse Logistics case study
2. Improving business portfolio management of Reman Deere's
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 Reman Deere's
Strengths John Deere Reman: Creating Value Through Reverse Logistics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reman Deere's in John Deere Reman: Creating Value Through Reverse Logistics Harvard Business Review case study are -
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Reman Deere's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Reman Deere's 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.
High brand equity
– Reman Deere's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Reman Deere's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Reman Deere's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in John Deere Reman: Creating Value Through Reverse Logistics 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 Technology & Operations industry
– John Deere Reman: Creating Value Through Reverse Logistics firm has clearly differentiated products in the market place. This has enabled Reman Deere's to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Reman Deere's to invest into research and development (R&D) and innovation.
Analytics focus
– Reman Deere's 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, R. Chandrasekhar 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.
Learning organization
- Reman Deere's 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 Reman Deere's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in John Deere Reman: Creating Value Through Reverse Logistics Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Technology & Operations field
– Reman Deere's 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 Reman Deere's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Reman Deere's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Reman Deere's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Reman Deere's 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.
Innovation driven organization
– Reman Deere's is one of the most innovative firm in sector. Manager in John Deere Reman: Creating Value Through Reverse Logistics Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Reman Deere's in the sector have low bargaining power. John Deere Reman: Creating Value Through Reverse Logistics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Reman Deere's to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Reman Deere's is present in almost all the verticals within the industry. This has provided firm in John Deere Reman: Creating Value Through Reverse Logistics 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.
Weaknesses John Deere Reman: Creating Value Through Reverse Logistics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of John Deere Reman: Creating Value Through Reverse Logistics are -
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 Reman Deere's supply chain. Even after few cautionary changes mentioned in the HBR case study - John Deere Reman: Creating Value Through Reverse Logistics, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Reman Deere's vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study John Deere Reman: Creating Value Through Reverse Logistics, it seems that the employees of Reman Deere's 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 Reman Deere's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Reman Deere's 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 cash cycle compare to competitors
Reman Deere's 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 John Deere Reman: Creating Value Through Reverse Logistics 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 Reman Deere's 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Reman Deere's is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Reman Deere's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Reman Deere's to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Reman Deere's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Reman Deere's 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.
Slow to strategic competitive environment developments
– As John Deere Reman: Creating Value Through Reverse Logistics HBR case study mentions - Reman Deere's 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.
Lack of clear differentiation of Reman Deere's products
– To increase the profitability and margins on the products, Reman Deere's needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities John Deere Reman: Creating Value Through Reverse Logistics | 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 John Deere Reman: Creating Value Through Reverse Logistics are -
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. Reman Deere's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Reman Deere's 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 Technology & Operations segment.
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. Reman Deere's 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. Reman Deere's 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Reman Deere's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Reman Deere's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Reman Deere's 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.
Buying journey improvements
– Reman Deere's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. John Deere Reman: Creating Value Through Reverse Logistics 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Reman Deere's 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, John Deere Reman: Creating Value Through Reverse Logistics, 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
– Reman Deere's 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.
Developing new processes and practices
– Reman Deere's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Reman Deere's 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, Reman Deere's can use these opportunities to build new business models that can help the communities that Reman Deere's operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Leveraging digital technologies
– Reman Deere's 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.
Threats John Deere Reman: Creating Value Through Reverse Logistics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study John Deere Reman: Creating Value Through Reverse Logistics are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Reman Deere's 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.
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 Reman Deere's in the Technology & Operations sector and impact the bottomline of the organization.
Increasing wage structure of Reman Deere's
– 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 Reman Deere's.
Shortening product life cycle
– it is one of the major threat that Reman Deere's is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Reman Deere's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Reman Deere's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Reman Deere's 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.
Stagnating economy with rate increase
– Reman Deere's 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.
Consumer confidence and its impact on Reman Deere's 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.
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. Reman Deere's 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.
Regulatory challenges
– Reman Deere's 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 Technology & Operations industry regulations.
Weighted SWOT Analysis of John Deere Reman: Creating Value Through Reverse Logistics 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 John Deere Reman: Creating Value Through Reverse Logistics 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 John Deere Reman: Creating Value Through Reverse Logistics 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 John Deere Reman: Creating Value Through Reverse Logistics 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 John Deere Reman: Creating Value Through Reverse Logistics 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 Reman Deere's needs to make to build a sustainable competitive advantage.
