Ribe Maskinfabrik A/S - Developing New Business Areas SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ribe Maskinfabrik A/S - Developing New Business Areas
Ribe Maskinfabrik A/S (RM) had, during the last 15 years, developed from a simple machine works operating out of Southern Jutland (Denmark) to the modern and globalized RM Group consisting of three distinct business units. This change had developed gradually as its outsourcing activities became increasingly important during the last years. In the beginning, outsourcing activities developed in an ad-hoc and reactive manner. However, RM gained important knowledge on how to optimize the outsourcing processes, and it developed a very extensive network of suppliers, many of which it had relationships with for many years. This network was offered to RM's customers and represented a high value to them. RM had already established these contacts and was able to assure the quality of its partners, which saved its customers valuable time and effort. In that sense, RM exploited its own experience and network of suppliers and became an outsourcing consultant.
Authors :: Bo Nielsen, Torben Pedersen, Jacob Pyndt
Swot Analysis of "Ribe Maskinfabrik A/S - Developing New Business Areas" written by Bo Nielsen, Torben Pedersen, Jacob Pyndt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rm Maskinfabrik facing as an external strategic factors. Some of the topics covered in Ribe Maskinfabrik A/S - Developing New Business Areas case study are - Strategic Management Strategies, Networking, Strategy, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the Ribe Maskinfabrik A/S - Developing New Business Areas casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs,
cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Ribe Maskinfabrik A/S - Developing New Business Areas
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ribe Maskinfabrik A/S - Developing New Business Areas case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rm Maskinfabrik, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rm Maskinfabrik 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 Ribe Maskinfabrik A/S - Developing New Business Areas can be done for the following purposes –
1. Strategic planning using facts provided in Ribe Maskinfabrik A/S - Developing New Business Areas case study
2. Improving business portfolio management of Rm Maskinfabrik
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 Rm Maskinfabrik
Strengths Ribe Maskinfabrik A/S - Developing New Business Areas | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rm Maskinfabrik in Ribe Maskinfabrik A/S - Developing New Business Areas Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Rm Maskinfabrik in the sector have low bargaining power. Ribe Maskinfabrik A/S - Developing New Business Areas has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rm Maskinfabrik to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Rm Maskinfabrik is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Bo Nielsen, Torben Pedersen, Jacob Pyndt can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Rm Maskinfabrik 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 Rm Maskinfabrik is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ribe Maskinfabrik A/S - Developing New Business Areas Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Rm Maskinfabrik has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rm Maskinfabrik to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Rm Maskinfabrik 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.
Operational resilience
– The operational resilience strategy in the Ribe Maskinfabrik A/S - Developing New Business Areas 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
– Rm Maskinfabrik 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 Ribe Maskinfabrik A/S - Developing New Business Areas HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Rm Maskinfabrik
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rm Maskinfabrik does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Rm Maskinfabrik is one of the most innovative firm in sector. Manager in Ribe Maskinfabrik A/S - Developing New Business Areas Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Rm Maskinfabrik digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rm Maskinfabrik 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.
Diverse revenue streams
– Rm Maskinfabrik is present in almost all the verticals within the industry. This has provided firm in Ribe Maskinfabrik A/S - Developing New Business Areas 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.
Ability to recruit top talent
– Rm Maskinfabrik is one of the leading recruiters in the industry. Managers in the Ribe Maskinfabrik A/S - Developing New Business Areas are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Ribe Maskinfabrik A/S - Developing New Business Areas | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ribe Maskinfabrik A/S - Developing New Business Areas are -
High cash cycle compare to competitors
Rm Maskinfabrik 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ribe Maskinfabrik A/S - Developing New Business Areas, it seems that the employees of Rm Maskinfabrik 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.
Low market penetration in new markets
– Outside its home market of Rm Maskinfabrik, firm in the HBR case study Ribe Maskinfabrik A/S - Developing New Business Areas needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Rm Maskinfabrik 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ribe Maskinfabrik A/S - Developing New Business Areas, is just above the industry average. Rm Maskinfabrik 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.
Increasing silos among functional specialists
– The organizational structure of Rm Maskinfabrik is dominated by functional specialists. It is not different from other players in the Global Business segment. Rm Maskinfabrik needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rm Maskinfabrik to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Rm Maskinfabrik 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 - Ribe Maskinfabrik A/S - Developing New Business Areas should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Rm Maskinfabrik 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.
Skills based hiring
– The stress on hiring functional specialists at Rm Maskinfabrik 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.
Slow decision making process
– As mentioned earlier in the report, Rm Maskinfabrik 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. Rm Maskinfabrik 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.
Need for greater diversity
– Rm Maskinfabrik 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.
Opportunities Ribe Maskinfabrik A/S - Developing New Business Areas | 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 Ribe Maskinfabrik A/S - Developing New Business Areas are -
Leveraging digital technologies
– Rm Maskinfabrik 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.
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. Rm Maskinfabrik can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Rm Maskinfabrik 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.
Loyalty marketing
– Rm Maskinfabrik 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.
Buying journey improvements
– Rm Maskinfabrik can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ribe Maskinfabrik A/S - Developing New Business Areas 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rm Maskinfabrik 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rm Maskinfabrik can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rm Maskinfabrik 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, Ribe Maskinfabrik A/S - Developing New Business Areas, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Rm Maskinfabrik 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.
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 Rm Maskinfabrik 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.
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. Rm Maskinfabrik 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 Rm Maskinfabrik 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.
Manufacturing automation
– Rm Maskinfabrik can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Ribe Maskinfabrik A/S - Developing New Business Areas External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ribe Maskinfabrik A/S - Developing New Business Areas are -
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. Rm Maskinfabrik needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Regulatory challenges
– Rm Maskinfabrik 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.
Technology acceleration in Forth Industrial Revolution
– Rm Maskinfabrik has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Rm Maskinfabrik 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rm Maskinfabrik 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.
Stagnating economy with rate increase
– Rm Maskinfabrik 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rm Maskinfabrik 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 Ribe Maskinfabrik A/S - Developing New Business Areas .
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. Rm Maskinfabrik 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 Rm Maskinfabrik in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Rm Maskinfabrik
– 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 Rm Maskinfabrik.
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 Rm Maskinfabrik.
High dependence on third party suppliers
– Rm Maskinfabrik 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.
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.
Shortening product life cycle
– it is one of the major threat that Rm Maskinfabrik is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Ribe Maskinfabrik A/S - Developing New Business Areas 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 Ribe Maskinfabrik A/S - Developing New Business Areas 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 Ribe Maskinfabrik A/S - Developing New Business Areas 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 Ribe Maskinfabrik A/S - Developing New Business Areas 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 Ribe Maskinfabrik A/S - Developing New Business Areas 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 Rm Maskinfabrik needs to make to build a sustainable competitive advantage.
