Berendsen Island, an outsourced workwear service, uses the standard costing model to determine its profitability. Because the company recently reported a loss, the plant manager and the business controller investigate time-driven activity-based costing in an effort to gain insights into its cost structures. The company also needs to provide a quote to two potential new customers. Filip Roodhooft is affiliated with Vlerick Business School. Kristof Stouthuysen is affiliated with Vlerick Business School. Ineke Teunis is affiliated with Vlerick Business School.
Authors :: Rick Bisselink, Filip Roodhooft, Kristof Stouthuysen, Ineke Teunis
Swot Analysis of "Berendsen Island" written by Rick Bisselink, Filip Roodhooft, Kristof Stouthuysen, Ineke Teunis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vlerick Berendsen facing as an external strategic factors. Some of the topics covered in Berendsen Island case study are - Strategic Management Strategies, Budgeting, Pricing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Berendsen Island casestudy better are - – increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization,
supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Berendsen Island case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vlerick Berendsen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vlerick Berendsen 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 Berendsen Island can be done for the following purposes –
1. Strategic planning using facts provided in Berendsen Island case study
2. Improving business portfolio management of Vlerick Berendsen
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 Vlerick Berendsen
Strengths Berendsen Island | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vlerick Berendsen in Berendsen Island Harvard Business Review case study are -
Successful track record of launching new products
– Vlerick Berendsen has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vlerick Berendsen 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.
Operational resilience
– The operational resilience strategy in the Berendsen Island Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Vlerick Berendsen has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vlerick Berendsen to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Vlerick Berendsen is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Vlerick Berendsen has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Berendsen Island 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.
Learning organization
- Vlerick Berendsen 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 Vlerick Berendsen is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Berendsen Island Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Vlerick Berendsen 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.
Superior customer experience
– The customer experience strategy of Vlerick Berendsen in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Vlerick Berendsen in the sector have low bargaining power. Berendsen Island has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vlerick Berendsen to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Vlerick Berendsen is one of the leading recruiters in the industry. Managers in the Berendsen Island are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Vlerick Berendsen is present in almost all the verticals within the industry. This has provided firm in Berendsen Island 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.
Organizational Resilience of Vlerick Berendsen
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vlerick Berendsen does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Berendsen Island | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Berendsen Island are -
Products dominated business model
– Even though Vlerick Berendsen 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 - Berendsen Island should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Berendsen Island 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 Vlerick Berendsen has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Vlerick Berendsen is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Vlerick Berendsen needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vlerick Berendsen to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Berendsen Island 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 Vlerick Berendsen 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vlerick Berendsen is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Berendsen Island can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Vlerick Berendsen 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Berendsen Island, is just above the industry average. Vlerick Berendsen 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.
Aligning sales with marketing
– It come across in the case study Berendsen Island 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 Berendsen Island can leverage the sales team experience to cultivate customer relationships as Vlerick Berendsen is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Berendsen Island, in the dynamic environment Vlerick Berendsen has struggled to respond to the nimble upstart competition. Vlerick Berendsen has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Vlerick Berendsen supply chain. Even after few cautionary changes mentioned in the HBR case study - Berendsen Island, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vlerick Berendsen vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Berendsen Island HBR case study mentions - Vlerick Berendsen 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.
Opportunities Berendsen Island | 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 Berendsen Island are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vlerick Berendsen 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
– Vlerick Berendsen 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 Berendsen Island - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vlerick Berendsen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vlerick Berendsen 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.
Leveraging digital technologies
– Vlerick Berendsen 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.
Learning at scale
– Online learning technologies has now opened space for Vlerick Berendsen 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vlerick Berendsen can use these opportunities to build new business models that can help the communities that Vlerick Berendsen operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vlerick Berendsen 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 Vlerick Berendsen to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Vlerick Berendsen can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Berendsen Island 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.
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 Vlerick Berendsen 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.
Developing new processes and practices
– Vlerick Berendsen 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.
Building a culture of innovation
– managers at Vlerick Berendsen 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.
Loyalty marketing
– Vlerick Berendsen has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Vlerick Berendsen in the consumer business. Now Vlerick Berendsen can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Berendsen Island External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Berendsen Island are -
High dependence on third party suppliers
– Vlerick Berendsen 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.
Technology acceleration in Forth Industrial Revolution
– Vlerick Berendsen has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Vlerick Berendsen 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.
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 Vlerick Berendsen 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.
Regulatory challenges
– Vlerick Berendsen 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.
Increasing wage structure of Vlerick Berendsen
– 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 Vlerick Berendsen.
Shortening product life cycle
– it is one of the major threat that Vlerick Berendsen is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Vlerick Berendsen 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. Vlerick Berendsen can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vlerick Berendsen 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Berendsen Island, Vlerick Berendsen 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 .
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. Vlerick Berendsen 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.
Stagnating economy with rate increase
– Vlerick Berendsen 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vlerick Berendsen can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Berendsen Island .
Weighted SWOT Analysis of Berendsen Island 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 Berendsen Island 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 Berendsen Island 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 Berendsen Island 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 Berendsen Island 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 Vlerick Berendsen needs to make to build a sustainable competitive advantage.
