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AB Sandvik Saws & Tools: The Ergo Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of AB Sandvik Saws & Tools: The Ergo Strategy


Sandvik's saws and tools division has invested heavily in developing a world-class competency in ergonomic handtool design and manufacture. The Ergo strategy appears to be working in Europe, but North American results are disappointing. Goran Gezelius, division president, must decide how to proceed with the Ergo strategy.

Authors :: Roderick E. White, Julian Birkinshaw

Topics :: Global Business

Tags :: Marketing, Strategy execution, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "AB Sandvik Saws & Tools: The Ergo Strategy" written by Roderick E. White, Julian Birkinshaw includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ergo Saws facing as an external strategic factors. Some of the topics covered in AB Sandvik Saws & Tools: The Ergo Strategy case study are - Strategic Management Strategies, Marketing, Strategy execution and Global Business.


Some of the macro environment factors that can be used to understand the AB Sandvik Saws & Tools: The Ergo Strategy casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, central banks are concerned over increasing inflation, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, etc



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Introduction to SWOT Analysis of AB Sandvik Saws & Tools: The Ergo Strategy


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AB Sandvik Saws & Tools: The Ergo Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ergo Saws, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ergo Saws 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 AB Sandvik Saws & Tools: The Ergo Strategy can be done for the following purposes –
1. Strategic planning using facts provided in AB Sandvik Saws & Tools: The Ergo Strategy case study
2. Improving business portfolio management of Ergo Saws
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 Ergo Saws




Strengths AB Sandvik Saws & Tools: The Ergo Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Ergo Saws in AB Sandvik Saws & Tools: The Ergo Strategy Harvard Business Review case study are -

Cross disciplinary teams

– Horizontal connected teams at the Ergo Saws 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.

Highly skilled collaborators

– Ergo Saws 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 AB Sandvik Saws & Tools: The Ergo Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Strong track record of project management

– Ergo Saws is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Digital Transformation in Global Business segment

- digital transformation varies from industry to industry. For Ergo Saws digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ergo Saws 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.

Ability to recruit top talent

– Ergo Saws is one of the leading recruiters in the industry. Managers in the AB Sandvik Saws & Tools: The Ergo Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Low bargaining power of suppliers

– Suppliers of Ergo Saws in the sector have low bargaining power. AB Sandvik Saws & Tools: The Ergo Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ergo Saws to manage not only supply disruptions but also source products at highly competitive prices.

Effective Research and Development (R&D)

– Ergo Saws 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 AB Sandvik Saws & Tools: The Ergo Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Learning organization

- Ergo Saws 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 Ergo Saws is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AB Sandvik Saws & Tools: The Ergo Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Diverse revenue streams

– Ergo Saws is present in almost all the verticals within the industry. This has provided firm in AB Sandvik Saws & Tools: The Ergo Strategy 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

– Ergo Saws has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ergo Saws to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Analytics focus

– Ergo Saws 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 Roderick E. White, Julian Birkinshaw 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.

Organizational Resilience of Ergo Saws

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ergo Saws does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.



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Net Promoter Score



Weaknesses AB Sandvik Saws & Tools: The Ergo Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of AB Sandvik Saws & Tools: The Ergo Strategy are -

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ergo Saws is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AB Sandvik Saws & Tools: The Ergo Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

High operating costs

– Compare to the competitors, firm in the HBR case study AB Sandvik Saws & Tools: The Ergo Strategy 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 Ergo Saws 's lucrative customers.

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 Ergo Saws supply chain. Even after few cautionary changes mentioned in the HBR case study - AB Sandvik Saws & Tools: The Ergo Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ergo Saws vulnerable to further global disruptions in South East Asia.

Interest costs

– Compare to the competition, Ergo Saws 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 Ergo Saws 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 - AB Sandvik Saws & Tools: The Ergo Strategy should strive to include more intangible value offerings along with its core products and services.

Aligning sales with marketing

– It come across in the case study AB Sandvik Saws & Tools: The Ergo Strategy 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 AB Sandvik Saws & Tools: The Ergo Strategy can leverage the sales team experience to cultivate customer relationships as Ergo Saws is planning to shift buying processes online.

Lack of clear differentiation of Ergo Saws products

– To increase the profitability and margins on the products, Ergo Saws needs to provide more differentiated products than what it is currently offering in the marketplace.

No frontier risks strategy

– After analyzing the HBR case study AB Sandvik Saws & Tools: The Ergo Strategy, 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.

High bargaining power of channel partners

– Because of the regulatory requirements, Roderick E. White, Julian Birkinshaw suggests that, Ergo Saws 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study AB Sandvik Saws & Tools: The Ergo Strategy, it seems that the employees of Ergo Saws 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, Ergo Saws 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.




Opportunities AB Sandvik Saws & Tools: The Ergo Strategy | 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 AB Sandvik Saws & Tools: The Ergo Strategy are -

Learning at scale

– Online learning technologies has now opened space for Ergo Saws 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Ergo Saws is facing challenges because of the dominance of functional experts in the organization. AB Sandvik Saws & Tools: The Ergo Strategy 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Ergo Saws 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.

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 Ergo Saws in the consumer business. Now Ergo Saws 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. Ergo Saws 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. Ergo Saws 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.

Creating value in data economy

– The success of analytics program of Ergo Saws has opened avenues for new revenue streams for the organization in the industry. This can help Ergo Saws to build a more holistic ecosystem as suggested in the AB Sandvik Saws & Tools: The Ergo Strategy case study. Ergo Saws can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Ergo Saws 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.

Buying journey improvements

– Ergo Saws can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AB Sandvik Saws & Tools: The Ergo Strategy 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, Ergo Saws 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ergo Saws 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 Ergo Saws to hire the very best people irrespective of their geographical location.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Ergo Saws can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Loyalty marketing

– Ergo Saws 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.

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. Ergo Saws can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.




Threats AB Sandvik Saws & Tools: The Ergo Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study AB Sandvik Saws & Tools: The Ergo Strategy are -

High dependence on third party suppliers

– Ergo Saws 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 wage structure of Ergo Saws

– 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 Ergo Saws.

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. Ergo Saws 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 Ergo Saws 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.

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 Ergo Saws 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 Ergo Saws with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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. Ergo Saws can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– Ergo Saws 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. Ergo Saws can take advantage of this fund but it will also bring new competitors in the Global Business industry.

Stagnating economy with rate increase

– Ergo Saws 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

– Ergo Saws has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Ergo Saws 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.

Shortening product life cycle

– it is one of the major threat that Ergo Saws 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 Ergo Saws business can come under increasing regulations regarding data privacy, data security, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Ergo Saws 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 AB Sandvik Saws & Tools: The Ergo Strategy .




Weighted SWOT Analysis of AB Sandvik Saws & Tools: The Ergo Strategy 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 AB Sandvik Saws & Tools: The Ergo Strategy 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 AB Sandvik Saws & Tools: The Ergo Strategy 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 AB Sandvik Saws & Tools: The Ergo Strategy 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 AB Sandvik Saws & Tools: The Ergo Strategy 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 Ergo Saws needs to make to build a sustainable competitive advantage.



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