MAN B&W Diesel A/S - Managing Licensees in a Globalized World SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of MAN B&W Diesel A/S - Managing Licensees in a Globalized World
MAN B&W Diesel (MBD), a subsidiary of MAN AG, had become very successful by having its large two-stroke diesel engines produced under licence in Asia. The success had led it to a position as world leader in ship engines, with world market shares oscillating between 70 and 80 per cent. The relationship between MBD and the licensees was characterized by both parties leveraging each other's competencies. It was critical for MBD to access new knowledge in order to optimize products from the producing licensees. Similarly, the licensees leveraged the access to the design specifications of the engines as well as expert knowledge and service offerings from MBD. Despite MBD's success with the licence business model during the last years, recent developments had sparked some concerns of the model's long-term sustainability and feasibility. Hence, the main challenge facing MBD was how to future-proof and perhaps adjust its business model to secure more control of critical knowledge and the licensees without jeopardizing the productive and lucrative licensee relationships.
Swot Analysis of "MAN B&W Diesel A/S - Managing Licensees in a Globalized World" written by Torben Pedersen, Jacob Pyndt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mbd Licensees facing as an external strategic factors. Some of the topics covered in MAN B&W Diesel A/S - Managing Licensees in a Globalized World case study are - Strategic Management Strategies, International business, Strategy, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the MAN B&W Diesel A/S - Managing Licensees in a Globalized World casestudy better are - – technology disruption, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, geopolitical disruptions,
wage bills are increasing, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of MAN B&W Diesel A/S - Managing Licensees in a Globalized World
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MAN B&W Diesel A/S - Managing Licensees in a Globalized World case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mbd Licensees, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mbd Licensees 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World can be done for the following purposes –
1. Strategic planning using facts provided in MAN B&W Diesel A/S - Managing Licensees in a Globalized World case study
2. Improving business portfolio management of Mbd Licensees
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 Mbd Licensees
Strengths MAN B&W Diesel A/S - Managing Licensees in a Globalized World | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mbd Licensees in MAN B&W Diesel A/S - Managing Licensees in a Globalized World Harvard Business Review case study are -
Organizational Resilience of Mbd Licensees
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mbd Licensees does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Mbd Licensees digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mbd Licensees 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.
Sustainable margins compare to other players in Global Business industry
– MAN B&W Diesel A/S - Managing Licensees in a Globalized World firm has clearly differentiated products in the market place. This has enabled Mbd Licensees to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Mbd Licensees to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Mbd Licensees 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Mbd Licensees in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Mbd Licensees 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.
Effective Research and Development (R&D)
– Mbd Licensees has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study MAN B&W Diesel A/S - Managing Licensees in a Globalized World - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Mbd Licensees is one of the most innovative firm in sector. Manager in MAN B&W Diesel A/S - Managing Licensees in a Globalized World Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Mbd Licensees has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mbd Licensees 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.
Training and development
– Mbd Licensees has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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.
High switching costs
– The high switching costs that Mbd Licensees 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.
Learning organization
- Mbd Licensees 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 Mbd Licensees is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MAN B&W Diesel A/S - Managing Licensees in a Globalized World Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses MAN B&W Diesel A/S - Managing Licensees in a Globalized World | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MAN B&W Diesel A/S - Managing Licensees in a Globalized World are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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 Mbd Licensees has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Mbd Licensees 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. Mbd Licensees 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.
Slow to strategic competitive environment developments
– As MAN B&W Diesel A/S - Managing Licensees in a Globalized World HBR case study mentions - Mbd Licensees 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study MAN B&W Diesel A/S - Managing Licensees in a Globalized World, in the dynamic environment Mbd Licensees has struggled to respond to the nimble upstart competition. Mbd Licensees has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Torben Pedersen, Jacob Pyndt suggests that, Mbd Licensees 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.
Lack of clear differentiation of Mbd Licensees products
– To increase the profitability and margins on the products, Mbd Licensees needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World can leverage the sales team experience to cultivate customer relationships as Mbd Licensees is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Mbd Licensees is dominated by functional specialists. It is not different from other players in the Global Business segment. Mbd Licensees needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mbd Licensees to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study MAN B&W Diesel A/S - Managing Licensees in a Globalized World, is just above the industry average. Mbd Licensees 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, Mbd Licensees is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study MAN B&W Diesel A/S - Managing Licensees in a Globalized World can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Mbd Licensees, firm in the HBR case study MAN B&W Diesel A/S - Managing Licensees in a Globalized World needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities MAN B&W Diesel A/S - Managing Licensees in a Globalized World | 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Mbd Licensees 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mbd Licensees 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, MAN B&W Diesel A/S - Managing Licensees in a Globalized World, 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 Mbd Licensees has opened avenues for new revenue streams for the organization in the industry. This can help Mbd Licensees to build a more holistic ecosystem as suggested in the MAN B&W Diesel A/S - Managing Licensees in a Globalized World case study. Mbd Licensees can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Mbd Licensees in the consumer business. Now Mbd Licensees can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mbd Licensees can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mbd Licensees 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 Mbd Licensees to hire the very best people irrespective of their geographical location.
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. Mbd Licensees 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. Mbd Licensees 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.
Building a culture of innovation
– managers at Mbd Licensees 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 Global Business segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mbd Licensees is facing challenges because of the dominance of functional experts in the organization. MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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.
Developing new processes and practices
– Mbd Licensees 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mbd Licensees in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Loyalty marketing
– Mbd Licensees 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.
Using analytics as competitive advantage
– Mbd Licensees 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mbd Licensees to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats MAN B&W Diesel A/S - Managing Licensees in a Globalized World External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MAN B&W Diesel A/S - Managing Licensees in a Globalized World are -
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. Mbd Licensees 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.
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 Mbd Licensees business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Mbd Licensees 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 wage structure of Mbd Licensees
– 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 Mbd Licensees.
Regulatory challenges
– Mbd Licensees 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mbd Licensees in the Global Business industry. The Global Business 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. Mbd Licensees needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Mbd Licensees.
High dependence on third party suppliers
– Mbd Licensees 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 Mbd Licensees in the Global Business sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mbd Licensees 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World .
Shortening product life cycle
– it is one of the major threat that Mbd Licensees is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mbd Licensees with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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 MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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 Mbd Licensees needs to make to build a sustainable competitive advantage.