Case Study Description of Schweizerische Maschinenfabrik Zug, A.G.
Schweizerische Maschinenfabrik Zug (SMZ), a 110-year old Swiss machinery firm, faces several issues at the end of 1992. It's not clear whether the company will be able to maintain its traditional price premium in the face of foreign competition. The firm must chart a course through the aftermath of the Persian Gulf War, political change in Eastern Europe, instability in the European Monetary System, and uncertainty over Switzerland's future in Europe.
Swot Analysis of "Schweizerische Maschinenfabrik Zug, A.G." written by Michael J. Enright includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Maschinenfabrik Schweizerische facing as an external strategic factors. Some of the topics covered in Schweizerische Maschinenfabrik Zug, A.G. case study are - Strategic Management Strategies, Currency, International business, Operations management and Global Business.
Some of the macro environment factors that can be used to understand the Schweizerische Maschinenfabrik Zug, A.G. casestudy better are - – increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, geopolitical disruptions, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs,
there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Schweizerische Maschinenfabrik Zug, A.G.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Schweizerische Maschinenfabrik Zug, A.G. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Maschinenfabrik Schweizerische, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Maschinenfabrik Schweizerische 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 Schweizerische Maschinenfabrik Zug, A.G. can be done for the following purposes –
1. Strategic planning using facts provided in Schweizerische Maschinenfabrik Zug, A.G. case study
2. Improving business portfolio management of Maschinenfabrik Schweizerische
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 Maschinenfabrik Schweizerische
Strengths Schweizerische Maschinenfabrik Zug, A.G. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Maschinenfabrik Schweizerische in Schweizerische Maschinenfabrik Zug, A.G. Harvard Business Review case study are -
Learning organization
- Maschinenfabrik Schweizerische 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 Maschinenfabrik Schweizerische is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Schweizerische Maschinenfabrik Zug, A.G. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Maschinenfabrik Schweizerische is one of the most innovative firm in sector. Manager in Schweizerische Maschinenfabrik Zug, A.G. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Maschinenfabrik Schweizerische 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 Schweizerische Maschinenfabrik Zug, A.G. 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 Schweizerische Maschinenfabrik Zug, A.G. 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.
Organizational Resilience of Maschinenfabrik Schweizerische
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Maschinenfabrik Schweizerische does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Maschinenfabrik Schweizerische 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.
Strong track record of project management
– Maschinenfabrik Schweizerische is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Maschinenfabrik Schweizerische in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Maschinenfabrik Schweizerische has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Schweizerische Maschinenfabrik Zug, A.G. 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.
Cross disciplinary teams
– Horizontal connected teams at the Maschinenfabrik Schweizerische 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.
Successful track record of launching new products
– Maschinenfabrik Schweizerische has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Maschinenfabrik Schweizerische 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Maschinenfabrik Schweizerische digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Maschinenfabrik Schweizerische 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.
Weaknesses Schweizerische Maschinenfabrik Zug, A.G. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Schweizerische Maschinenfabrik Zug, A.G. are -
Slow to strategic competitive environment developments
– As Schweizerische Maschinenfabrik Zug, A.G. HBR case study mentions - Maschinenfabrik Schweizerische 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 Maschinenfabrik Schweizerische supply chain. Even after few cautionary changes mentioned in the HBR case study - Schweizerische Maschinenfabrik Zug, A.G., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Maschinenfabrik Schweizerische vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Maschinenfabrik Schweizerische 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.
Lack of clear differentiation of Maschinenfabrik Schweizerische products
– To increase the profitability and margins on the products, Maschinenfabrik Schweizerische needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Maschinenfabrik Schweizerische 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. Maschinenfabrik Schweizerische 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.
Skills based hiring
– The stress on hiring functional specialists at Maschinenfabrik Schweizerische 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Schweizerische Maschinenfabrik Zug, A.G., it seems that the employees of Maschinenfabrik Schweizerische 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Schweizerische Maschinenfabrik Zug, A.G. 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 Maschinenfabrik Schweizerische has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Schweizerische Maschinenfabrik Zug, A.G. 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 Maschinenfabrik Schweizerische 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Maschinenfabrik Schweizerische is dominated by functional specialists. It is not different from other players in the Global Business segment. Maschinenfabrik Schweizerische needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Maschinenfabrik Schweizerische to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Maschinenfabrik Schweizerische is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Schweizerische Maschinenfabrik Zug, A.G. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Schweizerische Maschinenfabrik Zug, A.G. | 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 Schweizerische Maschinenfabrik Zug, A.G. are -
Creating value in data economy
– The success of analytics program of Maschinenfabrik Schweizerische has opened avenues for new revenue streams for the organization in the industry. This can help Maschinenfabrik Schweizerische to build a more holistic ecosystem as suggested in the Schweizerische Maschinenfabrik Zug, A.G. case study. Maschinenfabrik Schweizerische can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Maschinenfabrik Schweizerische 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.
Learning at scale
– Online learning technologies has now opened space for Maschinenfabrik Schweizerische 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 Maschinenfabrik Schweizerische 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 Maschinenfabrik Schweizerische to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Maschinenfabrik Schweizerische 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.
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 Maschinenfabrik Schweizerische 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.
Developing new processes and practices
– Maschinenfabrik Schweizerische 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.
Better consumer reach
– The expansion of the 5G network will help Maschinenfabrik Schweizerische to increase its market reach. Maschinenfabrik Schweizerische 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, Maschinenfabrik Schweizerische is facing challenges because of the dominance of functional experts in the organization. Schweizerische Maschinenfabrik Zug, A.G. 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.
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. Maschinenfabrik Schweizerische can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Maschinenfabrik Schweizerische 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 Schweizerische Maschinenfabrik Zug, A.G. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Maschinenfabrik Schweizerische 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, Maschinenfabrik Schweizerische 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, Schweizerische Maschinenfabrik Zug, A.G., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Maschinenfabrik Schweizerische can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Schweizerische Maschinenfabrik Zug, A.G. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Schweizerische Maschinenfabrik Zug, A.G. are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Maschinenfabrik Schweizerische 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 Schweizerische Maschinenfabrik Zug, A.G. .
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. Maschinenfabrik Schweizerische can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Maschinenfabrik Schweizerische needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Maschinenfabrik Schweizerische 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.
Consumer confidence and its impact on Maschinenfabrik Schweizerische 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.
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.
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 Maschinenfabrik Schweizerische in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Maschinenfabrik Schweizerische
– 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 Maschinenfabrik Schweizerische.
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. Maschinenfabrik Schweizerische 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.
Environmental challenges
– Maschinenfabrik Schweizerische 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. Maschinenfabrik Schweizerische can take advantage of this fund but it will also bring new competitors in the Global Business industry.
High dependence on third party suppliers
– Maschinenfabrik Schweizerische 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.
Stagnating economy with rate increase
– Maschinenfabrik Schweizerische 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.
Technology acceleration in Forth Industrial Revolution
– Maschinenfabrik Schweizerische has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Maschinenfabrik Schweizerische 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.
Weighted SWOT Analysis of Schweizerische Maschinenfabrik Zug, A.G. 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 Schweizerische Maschinenfabrik Zug, A.G. 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 Schweizerische Maschinenfabrik Zug, A.G. 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 Schweizerische Maschinenfabrik Zug, A.G. 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 Schweizerische Maschinenfabrik Zug, A.G. 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 Maschinenfabrik Schweizerische needs to make to build a sustainable competitive advantage.