Case Study Description of Akron Crane Works: The Insourcing Proposal
In 2017, Peter Tang must prepare the economic analysis of a proposal to insource production of certain parts currently purchased by the Tower and Lattice (TAL) division of Akron Crane Works (ACW), a world leader in heavy lifting machinery. The primary motivations for the proposal were rising costs due to vendor price increases and long vendor lead times. The TAL division believed internal production would cost less and that, with increased control of production, the division could reduce lead times and even reduce working capital needs.
Swot Analysis of "Akron Crane Works: The Insourcing Proposal" written by Marc Lipson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Akron Tal facing as an external strategic factors. Some of the topics covered in Akron Crane Works: The Insourcing Proposal case study are - Strategic Management Strategies, Economics, Manufacturing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Akron Crane Works: The Insourcing Proposal casestudy better are - – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, technology disruption,
challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Akron Crane Works: The Insourcing Proposal
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Akron Crane Works: The Insourcing Proposal case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Akron Tal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Akron Tal 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 Akron Crane Works: The Insourcing Proposal can be done for the following purposes –
1. Strategic planning using facts provided in Akron Crane Works: The Insourcing Proposal case study
2. Improving business portfolio management of Akron Tal
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Akron Tal
Strengths Akron Crane Works: The Insourcing Proposal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Akron Tal in Akron Crane Works: The Insourcing Proposal Harvard Business Review case study are -
Organizational Resilience of Akron Tal
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Akron Tal does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Akron Tal 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 Akron Tal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Akron Crane Works: The Insourcing Proposal Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Akron Tal is one of the most innovative firm in sector. Manager in Akron Crane Works: The Insourcing Proposal 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 Finance & Accounting field
– Akron Tal 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 Akron Tal 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
– Akron Tal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Akron Tal 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.
Effective Research and Development (R&D)
– Akron Tal 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 Akron Crane Works: The Insourcing Proposal - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Akron Tal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Akron Tal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Akron Tal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Akron Tal has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Training and development
– Akron Tal has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Akron Crane Works: The Insourcing Proposal 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 Finance & Accounting industry
– Akron Crane Works: The Insourcing Proposal firm has clearly differentiated products in the market place. This has enabled Akron Tal to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Akron Tal to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Akron Tal in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Akron Tal are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Akron Crane Works: The Insourcing Proposal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Akron Crane Works: The Insourcing Proposal are -
Capital Spending Reduction
– Even during the low interest decade, Akron Tal 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Akron Tal 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
Akron Tal 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.
Slow decision making process
– As mentioned earlier in the report, Akron Tal has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Akron Tal even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
No frontier risks strategy
– After analyzing the HBR case study Akron Crane Works: The Insourcing Proposal, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Akron Tal is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Akron Crane Works: The Insourcing Proposal can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Akron Tal 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.
Increasing silos among functional specialists
– The organizational structure of Akron Tal is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Akron Tal needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Akron Tal to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Akron Tal, firm in the HBR case study Akron Crane Works: The Insourcing Proposal needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Akron Crane Works: The Insourcing Proposal 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 Akron Crane Works: The Insourcing Proposal can leverage the sales team experience to cultivate customer relationships as Akron Tal is planning to shift buying processes online.
Products dominated business model
– Even though Akron Tal 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 - Akron Crane Works: The Insourcing Proposal should strive to include more intangible value offerings along with its core products and services.
Opportunities Akron Crane Works: The Insourcing Proposal | 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 Akron Crane Works: The Insourcing Proposal are -
Creating value in data economy
– The success of analytics program of Akron Tal has opened avenues for new revenue streams for the organization in the industry. This can help Akron Tal to build a more holistic ecosystem as suggested in the Akron Crane Works: The Insourcing Proposal case study. Akron Tal can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Akron Tal 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, Akron Crane Works: The Insourcing Proposal, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Akron Tal 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 Akron Tal to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Akron Tal 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.
Learning at scale
– Online learning technologies has now opened space for Akron Tal 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Akron Tal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Akron Tal is facing challenges because of the dominance of functional experts in the organization. Akron Crane Works: The Insourcing Proposal 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.
Building a culture of innovation
– managers at Akron Tal 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 Finance & Accounting segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Akron Tal 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. Akron Tal 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.
Developing new processes and practices
– Akron Tal can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Akron Tal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Akron Tal 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.
Better consumer reach
– The expansion of the 5G network will help Akron Tal to increase its market reach. Akron Tal 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.
Threats Akron Crane Works: The Insourcing Proposal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Akron Crane Works: The Insourcing Proposal are -
Increasing wage structure of Akron Tal
– 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 Akron Tal.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Akron Crane Works: The Insourcing Proposal, Akron Tal may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Akron Tal in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High 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. Akron Tal needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Akron Tal business can come under increasing regulations regarding data privacy, data security, etc.
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. Akron Tal 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.
Environmental challenges
– Akron Tal 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. Akron Tal can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Akron Tal can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Akron Tal has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Akron Tal needs to keep up with the evolution of technology in the Finance & Accounting 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.
Regulatory challenges
– Akron Tal 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 Finance & Accounting industry regulations.
Shortening product life cycle
– it is one of the major threat that Akron Tal is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Akron Crane Works: The Insourcing Proposal 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 Akron Crane Works: The Insourcing Proposal 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 Akron Crane Works: The Insourcing Proposal 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 Akron Crane Works: The Insourcing Proposal 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 Akron Crane Works: The Insourcing Proposal 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 Akron Tal needs to make to build a sustainable competitive advantage.
