Case Study Description of Textron Corporation-Benchmarking Performance
This is a Thunderbird Case Study.Anna Amphlett, a financial analyst at Textron Corporation, has been asked by the controller to benchmark the company's recent financial performance against competitors in the aerospace and defense industry. Top management plans to assess the performance of the company's supply chain and its future working capital requirements. Textron experienced impressive stock price growth in the last five years, but top management is particularly interested in understanding the company's sizeable investments in net working capital over the same period. In benchmarking Textron's performance, Amphlett must also consider what to do about accounting method differences across companies in the aerospace and defense industry, since they may have a significant effect on the interpretation of differences in reported performance.
Swot Analysis of "Textron Corporation-Benchmarking Performance" written by Graeme Rankine includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Textron Amphlett facing as an external strategic factors. Some of the topics covered in Textron Corporation-Benchmarking Performance case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Textron Corporation-Benchmarking Performance casestudy better are - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
wage bills are increasing, increasing energy prices, etc
Introduction to SWOT Analysis of Textron Corporation-Benchmarking Performance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Textron Corporation-Benchmarking Performance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Textron Amphlett, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Textron Amphlett 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 Textron Corporation-Benchmarking Performance can be done for the following purposes –
1. Strategic planning using facts provided in Textron Corporation-Benchmarking Performance case study
2. Improving business portfolio management of Textron Amphlett
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 Textron Amphlett
Strengths Textron Corporation-Benchmarking Performance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Textron Amphlett in Textron Corporation-Benchmarking Performance Harvard Business Review case study are -
High brand equity
– Textron Amphlett has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Textron Amphlett to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Textron Amphlett is present in almost all the verticals within the industry. This has provided firm in Textron Corporation-Benchmarking Performance 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.
Successful track record of launching new products
– Textron Amphlett has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Textron Amphlett 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.
Cross disciplinary teams
– Horizontal connected teams at the Textron Amphlett 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.
Learning organization
- Textron Amphlett 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 Textron Amphlett is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Textron Corporation-Benchmarking Performance Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Textron Amphlett digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Textron Amphlett 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.
Ability to lead change in Finance & Accounting field
– Textron Amphlett 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 Textron Amphlett in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Textron Amphlett is one of the most innovative firm in sector. Manager in Textron Corporation-Benchmarking Performance Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Textron Amphlett is one of the leading recruiters in the industry. Managers in the Textron Corporation-Benchmarking Performance are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Finance & Accounting industry
– Textron Corporation-Benchmarking Performance firm has clearly differentiated products in the market place. This has enabled Textron Amphlett to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Textron Amphlett to invest into research and development (R&D) and innovation.
Training and development
– Textron Amphlett has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Textron Corporation-Benchmarking Performance 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.
Operational resilience
– The operational resilience strategy in the Textron Corporation-Benchmarking Performance 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.
Weaknesses Textron Corporation-Benchmarking Performance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Textron Corporation-Benchmarking Performance are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Textron Corporation-Benchmarking Performance, is just above the industry average. Textron Amphlett 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, Textron Amphlett is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Textron Corporation-Benchmarking Performance can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Textron Amphlett products
– To increase the profitability and margins on the products, Textron Amphlett needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Graeme Rankine suggests that, Textron Amphlett 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.
Need for greater diversity
– Textron Amphlett 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.
No frontier risks strategy
– After analyzing the HBR case study Textron Corporation-Benchmarking Performance, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Textron Corporation-Benchmarking Performance, in the dynamic environment Textron Amphlett has struggled to respond to the nimble upstart competition. Textron Amphlett has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Textron Corporation-Benchmarking Performance 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 Textron Amphlett has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Textron Amphlett 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 decision making process
– As mentioned earlier in the report, Textron Amphlett 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. Textron Amphlett 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.
Aligning sales with marketing
– It come across in the case study Textron Corporation-Benchmarking Performance 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 Textron Corporation-Benchmarking Performance can leverage the sales team experience to cultivate customer relationships as Textron Amphlett is planning to shift buying processes online.
Opportunities Textron Corporation-Benchmarking Performance | 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 Textron Corporation-Benchmarking Performance are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Textron Amphlett 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Textron Amphlett can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Textron Amphlett 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 Textron Corporation-Benchmarking Performance - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Textron Amphlett to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Textron Amphlett can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Textron Amphlett has opened avenues for new revenue streams for the organization in the industry. This can help Textron Amphlett to build a more holistic ecosystem as suggested in the Textron Corporation-Benchmarking Performance case study. Textron Amphlett can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Textron Amphlett 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. Textron Amphlett 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.
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 Textron Amphlett 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.
Better consumer reach
– The expansion of the 5G network will help Textron Amphlett to increase its market reach. Textron Amphlett 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Textron Amphlett in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Loyalty marketing
– Textron Amphlett 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Textron Amphlett 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 Textron Amphlett to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Textron Amphlett can use these opportunities to build new business models that can help the communities that Textron Amphlett operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Textron Amphlett is facing challenges because of the dominance of functional experts in the organization. Textron Corporation-Benchmarking Performance 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.
Threats Textron Corporation-Benchmarking Performance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Textron Corporation-Benchmarking Performance are -
High dependence on third party suppliers
– Textron Amphlett 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.
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 Textron Amphlett in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Textron Amphlett
– 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 Textron Amphlett.
Consumer confidence and its impact on Textron Amphlett 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.
Environmental challenges
– Textron Amphlett 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. Textron Amphlett can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Textron Corporation-Benchmarking Performance, Textron Amphlett 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Textron Amphlett 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 Textron Corporation-Benchmarking Performance .
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. Textron Amphlett 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Textron Amphlett 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. Textron Amphlett needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Textron Amphlett with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Textron Amphlett can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Weighted SWOT Analysis of Textron Corporation-Benchmarking Performance 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 Textron Corporation-Benchmarking Performance 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 Textron Corporation-Benchmarking Performance 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 Textron Corporation-Benchmarking Performance 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 Textron Corporation-Benchmarking Performance 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 Textron Amphlett needs to make to build a sustainable competitive advantage.
