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 - – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing transportation and logistics costs, cloud computing is disrupting traditional business models, wage bills are increasing, geopolitical disruptions,
talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
Ability to recruit top talent
– Mbd Licensees is one of the leading recruiters in the industry. Managers in the MAN B&W Diesel A/S - Managing Licensees in a Globalized World are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Mbd Licensees is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Global Business field
– Mbd Licensees 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 Mbd Licensees 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 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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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.
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.
Diverse revenue streams
– Mbd Licensees is present in almost all the verticals within the industry. This has provided firm in MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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.
Low bargaining power of suppliers
– Suppliers of Mbd Licensees in the sector have low bargaining power. MAN B&W Diesel A/S - Managing Licensees in a Globalized World has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mbd Licensees to manage not only supply disruptions but also source products at highly competitive prices.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Mbd Licensees 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.
Capital Spending Reduction
– Even during the low interest decade, Mbd Licensees 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study MAN B&W Diesel A/S - Managing Licensees in a Globalized World, it seems that the employees of Mbd Licensees 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.
High operating costs
– Compare to the competitors, firm in the HBR case study MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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 Mbd Licensees 's lucrative customers.
Need for greater diversity
– Mbd Licensees 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.
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.
High cash cycle compare to competitors
Mbd Licensees 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.
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.
Interest costs
– Compare to the competition, Mbd Licensees 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.
Products dominated business model
– Even though Mbd Licensees 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 - MAN B&W Diesel A/S - Managing Licensees in a Globalized World should strive to include more intangible value offerings along with its core products and services.
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 -
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.
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.
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. Mbd Licensees can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Buying journey improvements
– Mbd Licensees can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. MAN B&W Diesel A/S - Managing Licensees in a Globalized World 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 Mbd Licensees 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.
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.
Better consumer reach
– The expansion of the 5G network will help Mbd Licensees to increase its market reach. Mbd Licensees 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.
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.
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.
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. Mbd Licensees can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Mbd Licensees 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.
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.
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 -
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.
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.
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.
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. Mbd Licensees can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Mbd Licensees has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Mbd Licensees 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.
Environmental challenges
– Mbd Licensees 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. Mbd Licensees can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
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.
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.
Consumer confidence and its impact on Mbd Licensees 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
– 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.
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 .
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.