Ivar Kreuger and the Swedish Match Empire SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ivar Kreuger and the Swedish Match Empire
Taught in Evolution of Global Business. Globalization and corporate fraud are the central themes of this case on the international growth of Swedish Match in the interwar years. Between 1913 and 1932, Ivar Kreuger, known as the "Swedish Match King," built a small, family-owned match business into a $600 million global match empire. Despite the economic and political disruptions of the interwar period, Swedish Match owned manufacturing operations in 36 countries, had monopolies in 16 countries, and controlled 40% of the world's match production. Kreuger companies lent over $300 million dollars to governments in Europe, Latin America, and Asia in exchange for national match monopolies. Relying on international capital markets to finance acquisitions and monopoly deals, by 1929 the stocks and bonds of Kreuger companies were the most widely held securities in the United States and the world. After Kreuger's 1932 suicide, forensic auditors discovered that Kreuger had operated a giant pyramid scheme. His accounts were ridden with fictitious assets, the truth hidden in a maze of over 400 subsidiary companies. Swedish Match's deficits exceeded Sweden's national debt.
Swot Analysis of "Ivar Kreuger and the Swedish Match Empire" written by Geoffrey G. Jones, Ingrid Vargas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kreuger Match facing as an external strategic factors. Some of the topics covered in Ivar Kreuger and the Swedish Match Empire case study are - Strategic Management Strategies, Business law, Competition, Entrepreneurship, Ethics, Globalization, Government and Global Business.
Some of the macro environment factors that can be used to understand the Ivar Kreuger and the Swedish Match Empire casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
increasing energy prices, wage bills are increasing, etc
Introduction to SWOT Analysis of Ivar Kreuger and the Swedish Match Empire
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ivar Kreuger and the Swedish Match Empire case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kreuger Match, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kreuger Match 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 Ivar Kreuger and the Swedish Match Empire can be done for the following purposes –
1. Strategic planning using facts provided in Ivar Kreuger and the Swedish Match Empire case study
2. Improving business portfolio management of Kreuger Match
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kreuger Match
Strengths Ivar Kreuger and the Swedish Match Empire | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kreuger Match in Ivar Kreuger and the Swedish Match Empire Harvard Business Review case study are -
Ability to lead change in Global Business field
– Kreuger Match 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 Kreuger Match in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Kreuger Match
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kreuger Match does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Kreuger Match is one of the leading recruiters in the industry. Managers in the Ivar Kreuger and the Swedish Match Empire 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
– Kreuger Match is present in almost all the verticals within the industry. This has provided firm in Ivar Kreuger and the Swedish Match Empire 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.
Highly skilled collaborators
– Kreuger Match has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Ivar Kreuger and the Swedish Match Empire HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Ivar Kreuger and the Swedish Match Empire 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.
Innovation driven organization
– Kreuger Match is one of the most innovative firm in sector. Manager in Ivar Kreuger and the Swedish Match Empire Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Kreuger Match 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
- Kreuger Match 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 Kreuger Match is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ivar Kreuger and the Swedish Match Empire Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Global Business industry
– Ivar Kreuger and the Swedish Match Empire firm has clearly differentiated products in the market place. This has enabled Kreuger Match to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Kreuger Match to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Kreuger Match has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kreuger Match 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.
High brand equity
– Kreuger Match has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kreuger Match to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Ivar Kreuger and the Swedish Match Empire | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ivar Kreuger and the Swedish Match Empire are -
Capital Spending Reduction
– Even during the low interest decade, Kreuger Match 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kreuger Match is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ivar Kreuger and the Swedish Match Empire 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
Kreuger Match 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, Kreuger Match 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. Kreuger Match 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Kreuger Match 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 operating costs
– Compare to the competitors, firm in the HBR case study Ivar Kreuger and the Swedish Match Empire 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 Kreuger Match 's lucrative customers.
Lack of clear differentiation of Kreuger Match products
– To increase the profitability and margins on the products, Kreuger Match needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Ivar Kreuger and the Swedish Match Empire HBR case study mentions - Kreuger Match 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.
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 Kreuger Match supply chain. Even after few cautionary changes mentioned in the HBR case study - Ivar Kreuger and the Swedish Match Empire, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kreuger Match vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Kreuger Match 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 - Ivar Kreuger and the Swedish Match Empire should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ivar Kreuger and the Swedish Match Empire, it seems that the employees of Kreuger Match 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.
Opportunities Ivar Kreuger and the Swedish Match Empire | 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 Ivar Kreuger and the Swedish Match Empire are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kreuger Match 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. Kreuger Match 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.
Using analytics as competitive advantage
– Kreuger Match 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 Ivar Kreuger and the Swedish Match Empire - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kreuger Match to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Kreuger Match can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ivar Kreuger and the Swedish Match Empire 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 Kreuger Match 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.
Manufacturing automation
– Kreuger Match can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Leveraging digital technologies
– Kreuger Match 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.
Loyalty marketing
– Kreuger Match 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
– Kreuger Match can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kreuger Match can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Kreuger Match 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kreuger Match 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 Kreuger Match to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Kreuger Match to increase its market reach. Kreuger Match 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kreuger Match is facing challenges because of the dominance of functional experts in the organization. Ivar Kreuger and the Swedish Match Empire 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 Ivar Kreuger and the Swedish Match Empire External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ivar Kreuger and the Swedish Match Empire are -
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
– Kreuger Match 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 Global Business industry regulations.
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. Kreuger Match 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.
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 Kreuger Match in the Global Business sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Kreuger Match is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Kreuger Match.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kreuger Match with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Kreuger Match
– 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 Kreuger Match.
Environmental challenges
– Kreuger Match 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. Kreuger Match can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology acceleration in Forth Industrial Revolution
– Kreuger Match has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Kreuger Match needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Kreuger Match 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.
High dependence on third party suppliers
– Kreuger Match 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.
Weighted SWOT Analysis of Ivar Kreuger and the Swedish Match Empire 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 Ivar Kreuger and the Swedish Match Empire 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 Ivar Kreuger and the Swedish Match Empire 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 Ivar Kreuger and the Swedish Match Empire 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 Ivar Kreuger and the Swedish Match Empire 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 Kreuger Match needs to make to build a sustainable competitive advantage.
