Hoechst in the United States (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hoechst in the United States (A)
Describes the U.S. market for chemicals following WW II to the present and the attention of the market for global chemical companies. Traces the involvement of Hoechst in this market up to the 1980s when minimum growth has been offered through Hoechst's U.S. subsidiary, American Hoechst and the company is seeking opportunities for expansion through acquisition. Calenese Corp., the tenth largest chemical company in the United States, stands out as the best opportunity. Students will evaluate the strength of the Celanese opportunity in light of Hoechst's position, objectives, and past strategies. May be used with Hoechst and the German Chemical Industry and Hoechst in the United States (B).
Authors :: Benjamin Gomes-Casseres, Krista McQuade
Swot Analysis of "Hoechst in the United States (A)" written by Benjamin Gomes-Casseres, Krista McQuade includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hoechst Hoechst's facing as an external strategic factors. Some of the topics covered in Hoechst in the United States (A) case study are - Strategic Management Strategies, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the Hoechst in the United States (A) casestudy better are - – challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing energy prices, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Hoechst in the United States (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hoechst in the United States (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hoechst Hoechst's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hoechst Hoechst's 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 Hoechst in the United States (A) can be done for the following purposes –
1. Strategic planning using facts provided in Hoechst in the United States (A) case study
2. Improving business portfolio management of Hoechst Hoechst's
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 Hoechst Hoechst's
Strengths Hoechst in the United States (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hoechst Hoechst's in Hoechst in the United States (A) Harvard Business Review case study are -
Ability to recruit top talent
– Hoechst Hoechst's is one of the leading recruiters in the industry. Managers in the Hoechst in the United States (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Hoechst Hoechst's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hoechst Hoechst's 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.
Low bargaining power of suppliers
– Suppliers of Hoechst Hoechst's in the sector have low bargaining power. Hoechst in the United States (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hoechst Hoechst's to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Hoechst Hoechst's 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 Hoechst Hoechst's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Hoechst Hoechst's is one of the most innovative firm in sector. Manager in Hoechst in the United States (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Hoechst Hoechst's 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 Hoechst Hoechst's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hoechst in the United States (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Hoechst Hoechst's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hoechst in the United States (A) 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.
Diverse revenue streams
– Hoechst Hoechst's is present in almost all the verticals within the industry. This has provided firm in Hoechst in the United States (A) 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.
High brand equity
– Hoechst Hoechst's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hoechst Hoechst's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Hoechst Hoechst's 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.
Sustainable margins compare to other players in Global Business industry
– Hoechst in the United States (A) firm has clearly differentiated products in the market place. This has enabled Hoechst Hoechst's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Hoechst Hoechst's to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Hoechst Hoechst's 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 Hoechst in the United States (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Hoechst in the United States (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hoechst in the United States (A) are -
Interest costs
– Compare to the competition, Hoechst Hoechst's 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.
Slow decision making process
– As mentioned earlier in the report, Hoechst Hoechst's 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. Hoechst Hoechst's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Hoechst Hoechst's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Benjamin Gomes-Casseres, Krista McQuade suggests that, Hoechst Hoechst's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hoechst in the United States (A), is just above the industry average. Hoechst Hoechst's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hoechst in the United States (A), it seems that the employees of Hoechst Hoechst's 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.
Capital Spending Reduction
– Even during the low interest decade, Hoechst Hoechst's 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 operating costs
– Compare to the competitors, firm in the HBR case study Hoechst in the United States (A) 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 Hoechst Hoechst's 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Hoechst in the United States (A) 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 Hoechst in the United States (A) can leverage the sales team experience to cultivate customer relationships as Hoechst Hoechst's is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Hoechst in the United States (A), it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Hoechst Hoechst's 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 - Hoechst in the United States (A) should strive to include more intangible value offerings along with its core products and services.
Opportunities Hoechst in the United States (A) | 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 Hoechst in the United States (A) are -
Loyalty marketing
– Hoechst Hoechst's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hoechst Hoechst's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Hoechst Hoechst's 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.
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. Hoechst Hoechst's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Hoechst Hoechst's has opened avenues for new revenue streams for the organization in the industry. This can help Hoechst Hoechst's to build a more holistic ecosystem as suggested in the Hoechst in the United States (A) case study. Hoechst Hoechst's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Hoechst Hoechst's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hoechst in the United States (A) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hoechst Hoechst's 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 Hoechst Hoechst's to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hoechst Hoechst's 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.
Leveraging digital technologies
– Hoechst Hoechst's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hoechst Hoechst's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hoechst Hoechst's is facing challenges because of the dominance of functional experts in the organization. Hoechst in the United States (A) 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.
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 Hoechst Hoechst's in the consumer business. Now Hoechst Hoechst's can target international markets with far fewer capital restrictions requirements than the existing system.
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. Hoechst Hoechst's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Hoechst in the United States (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hoechst in the United States (A) are -
High dependence on third party suppliers
– Hoechst Hoechst's 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, Hoechst Hoechst's 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 Hoechst in the United States (A) .
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. Hoechst Hoechst's needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Hoechst Hoechst's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Hoechst Hoechst's 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.
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. Hoechst Hoechst's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Hoechst Hoechst's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Hoechst Hoechst's in the Global Business sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hoechst Hoechst's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Hoechst Hoechst's.
Environmental challenges
– Hoechst Hoechst's 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. Hoechst Hoechst's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Hoechst Hoechst's 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.
Shortening product life cycle
– it is one of the major threat that Hoechst Hoechst's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Hoechst Hoechst's business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Hoechst in the United States (A) 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 Hoechst in the United States (A) 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 Hoechst in the United States (A) 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 Hoechst in the United States (A) 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 Hoechst in the United States (A) 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 Hoechst Hoechst's needs to make to build a sustainable competitive advantage.
