Germany's Evolving Privatization Policies: The Plaschna Management KG SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Germany's Evolving Privatization Policies: The Plaschna Management KG
Describes the evolution of the German government's approach to restructuring East German firms. Three organizations and their interactions are examined: 1) the Treuhand, Germany's privatization agency; 2) the Plaschna Management KG, a private organization funded by the Treuhand and designed to reduce the potential inefficiency of state-owned enterprises; and 3) VEM, an electric motor producer that was once a large Kombinat and is now the largest firm managed by the Plaschna Management KG. Particular attention is paid to the Plaschna Management KG, an organization created to address problems with state-owned enterprises by specifying precise tradeoffs between multiple objectives and by constraining the government from actively interfering in management decision making.
Swot Analysis of "Germany's Evolving Privatization Policies: The Plaschna Management KG" written by Karen H. Wruck, Alexander Dyck includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Plaschna Kg facing as an external strategic factors. Some of the topics covered in Germany's Evolving Privatization Policies: The Plaschna Management KG case study are - Strategic Management Strategies, Government, Reorganization and Global Business.
Some of the macro environment factors that can be used to understand the Germany's Evolving Privatization Policies: The Plaschna Management KG casestudy better are - – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Germany's Evolving Privatization Policies: The Plaschna Management KG
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Germany's Evolving Privatization Policies: The Plaschna Management KG case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Plaschna Kg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Plaschna Kg 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 Germany's Evolving Privatization Policies: The Plaschna Management KG can be done for the following purposes –
1. Strategic planning using facts provided in Germany's Evolving Privatization Policies: The Plaschna Management KG case study
2. Improving business portfolio management of Plaschna Kg
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 Plaschna Kg
Strengths Germany's Evolving Privatization Policies: The Plaschna Management KG | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Plaschna Kg in Germany's Evolving Privatization Policies: The Plaschna Management KG Harvard Business Review case study are -
Strong track record of project management
– Plaschna Kg is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– Germany's Evolving Privatization Policies: The Plaschna Management KG firm has clearly differentiated products in the market place. This has enabled Plaschna Kg to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Plaschna Kg to invest into research and development (R&D) and innovation.
Ability to lead change in Global Business field
– Plaschna Kg 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 Plaschna Kg in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Plaschna Kg 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.
Successful track record of launching new products
– Plaschna Kg has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Plaschna Kg 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.
Organizational Resilience of Plaschna Kg
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Plaschna Kg does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Plaschna Kg is one of the leading recruiters in the industry. Managers in the Germany's Evolving Privatization Policies: The Plaschna Management KG are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Plaschna Kg has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Plaschna Kg to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Plaschna Kg 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 Plaschna Kg is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Germany's Evolving Privatization Policies: The Plaschna Management KG Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Plaschna Kg is one of the most innovative firm in sector. Manager in Germany's Evolving Privatization Policies: The Plaschna Management KG Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Germany's Evolving Privatization Policies: The Plaschna Management KG 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.
Analytics focus
– Plaschna Kg is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Karen H. Wruck, Alexander Dyck can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Germany's Evolving Privatization Policies: The Plaschna Management KG | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Germany's Evolving Privatization Policies: The Plaschna Management KG are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Plaschna Kg supply chain. Even after few cautionary changes mentioned in the HBR case study - Germany's Evolving Privatization Policies: The Plaschna Management KG, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Plaschna Kg vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Germany's Evolving Privatization Policies: The Plaschna Management KG, is just above the industry average. Plaschna Kg 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 strategic competitive environment developments
– As Germany's Evolving Privatization Policies: The Plaschna Management KG HBR case study mentions - Plaschna Kg 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.
Capital Spending Reduction
– Even during the low interest decade, Plaschna Kg 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.
High cash cycle compare to competitors
Plaschna Kg 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Plaschna Kg 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.
Interest costs
– Compare to the competition, Plaschna Kg 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.
Skills based hiring
– The stress on hiring functional specialists at Plaschna Kg has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Germany's Evolving Privatization Policies: The Plaschna Management KG 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 Plaschna Kg 's lucrative customers.
Products dominated business model
– Even though Plaschna Kg 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 - Germany's Evolving Privatization Policies: The Plaschna Management KG should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Karen H. Wruck, Alexander Dyck suggests that, Plaschna Kg 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.
Opportunities Germany's Evolving Privatization Policies: The Plaschna Management KG | 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 Germany's Evolving Privatization Policies: The Plaschna Management KG are -
Better consumer reach
– The expansion of the 5G network will help Plaschna Kg to increase its market reach. Plaschna Kg 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.
Loyalty marketing
– Plaschna Kg 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 Plaschna Kg in the consumer business. Now Plaschna Kg can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Plaschna Kg 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.
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. Plaschna Kg 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. Plaschna Kg 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.
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. Plaschna Kg can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Plaschna Kg 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.
Using analytics as competitive advantage
– Plaschna Kg 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 Germany's Evolving Privatization Policies: The Plaschna Management KG - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Plaschna Kg to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Plaschna Kg 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, Germany's Evolving Privatization Policies: The Plaschna Management KG, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Plaschna Kg has opened avenues for new revenue streams for the organization in the industry. This can help Plaschna Kg to build a more holistic ecosystem as suggested in the Germany's Evolving Privatization Policies: The Plaschna Management KG case study. Plaschna Kg can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Plaschna Kg can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Germany's Evolving Privatization Policies: The Plaschna Management KG 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Plaschna Kg can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Plaschna Kg 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.
Threats Germany's Evolving Privatization Policies: The Plaschna Management KG External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Germany's Evolving Privatization Policies: The Plaschna Management KG are -
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 Plaschna Kg business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Plaschna Kg 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.
High dependence on third party suppliers
– Plaschna Kg 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Plaschna Kg 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 Germany's Evolving Privatization Policies: The Plaschna Management KG .
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Germany's Evolving Privatization Policies: The Plaschna Management KG, Plaschna Kg may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Environmental challenges
– Plaschna Kg 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. Plaschna Kg can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Plaschna Kg.
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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Plaschna Kg can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Plaschna Kg with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Plaschna Kg 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.
Consumer confidence and its impact on Plaschna Kg 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.
Weighted SWOT Analysis of Germany's Evolving Privatization Policies: The Plaschna Management KG 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 Germany's Evolving Privatization Policies: The Plaschna Management KG 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 Germany's Evolving Privatization Policies: The Plaschna Management KG 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 Germany's Evolving Privatization Policies: The Plaschna Management KG 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 Germany's Evolving Privatization Policies: The Plaschna Management KG 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 Plaschna Kg needs to make to build a sustainable competitive advantage.
