Sustainable Development and Socially Responsible Investing: ABB in 2000 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Sustainable Development and Socially Responsible Investing: ABB in 2000

Several investment firms and mutual funds position themselves as providers or facilitators of opportunities for socially responsible investment. This case addresses the impact of these firms on publicly traded companies. Focuses on managers at ABB, a large multinational based in Switzerland that has tried to be a leader in integrating principles of sustainable development into its business strategies. ABB's managers now need to decide what sorts of relationships they would like to have with the firms in the socially responsible investment community and the extent to which they ought to take the preferences of these firms into account in tailoring their business strategies.

Authors :: Forest Reinhardt

Topics :: Global Business

Tags :: Ethics, Financial markets, International business, Manufacturing, Social enterprise, Social responsibility, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Sustainable Development and Socially Responsible Investing: ABB in 2000" written by Forest Reinhardt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Socially Abb facing as an external strategic factors. Some of the topics covered in Sustainable Development and Socially Responsible Investing: ABB in 2000 case study are - Strategic Management Strategies, Ethics, Financial markets, International business, Manufacturing, Social enterprise, Social responsibility, Sustainability and Global Business.

Some of the macro environment factors that can be used to understand the Sustainable Development and Socially Responsible Investing: ABB in 2000 casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, geopolitical disruptions, talent flight as more people leaving formal jobs, there is backlash against globalization, etc

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Introduction to SWOT Analysis of Sustainable Development and Socially Responsible Investing: ABB in 2000

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sustainable Development and Socially Responsible Investing: ABB in 2000 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Socially Abb, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Socially Abb 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Sustainable Development and Socially Responsible Investing: ABB in 2000 can be done for the following purposes –
1. Strategic planning using facts provided in Sustainable Development and Socially Responsible Investing: ABB in 2000 case study
2. Improving business portfolio management of Socially Abb
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 Socially Abb

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Strengths Sustainable Development and Socially Responsible Investing: ABB in 2000 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Socially Abb in Sustainable Development and Socially Responsible Investing: ABB in 2000 Harvard Business Review case study are -

Superior customer experience

– The customer experience strategy of Socially Abb in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Socially Abb is one of the most innovative firm in sector. Manager in Sustainable Development and Socially Responsible Investing: ABB in 2000 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Strong track record of project management

– Socially Abb 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 Socially Abb digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Socially Abb 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.

Learning organization

- Socially Abb 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 Socially Abb is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sustainable Development and Socially Responsible Investing: ABB in 2000 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Cross disciplinary teams

– Horizontal connected teams at the Socially Abb 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.

Effective Research and Development (R&D)

– Socially Abb 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Analytics focus

– Socially Abb 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 Forest Reinhardt 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.

Ability to lead change in Global Business field

– Socially Abb 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 Socially Abb in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Socially Abb has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Socially Abb 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.

Sustainable margins compare to other players in Global Business industry

– Sustainable Development and Socially Responsible Investing: ABB in 2000 firm has clearly differentiated products in the market place. This has enabled Socially Abb to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Socially Abb to invest into research and development (R&D) and innovation.

Low bargaining power of suppliers

– Suppliers of Socially Abb in the sector have low bargaining power. Sustainable Development and Socially Responsible Investing: ABB in 2000 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Socially Abb to manage not only supply disruptions but also source products at highly competitive prices.

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Weaknesses Sustainable Development and Socially Responsible Investing: ABB in 2000 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Sustainable Development and Socially Responsible Investing: ABB in 2000 are -

Interest costs

– Compare to the competition, Socially Abb 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Sustainable Development and Socially Responsible Investing: ABB in 2000, it seems that the employees of Socially Abb 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.

Lack of clear differentiation of Socially Abb products

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

Skills based hiring

– The stress on hiring functional specialists at Socially Abb 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.

Capital Spending Reduction

– Even during the low interest decade, Socially Abb 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.

Aligning sales with marketing

– It come across in the case study Sustainable Development and Socially Responsible Investing: ABB in 2000 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 can leverage the sales team experience to cultivate customer relationships as Socially Abb is planning to shift buying processes online.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Sustainable Development and Socially Responsible Investing: ABB in 2000, in the dynamic environment Socially Abb has struggled to respond to the nimble upstart competition. Socially Abb has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High operating costs

– Compare to the competitors, firm in the HBR case study Sustainable Development and Socially Responsible Investing: ABB in 2000 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 Socially Abb 's lucrative customers.

Slow decision making process

– As mentioned earlier in the report, Socially Abb 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. Socially Abb 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, Socially Abb 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.

Low market penetration in new markets

– Outside its home market of Socially Abb, firm in the HBR case study Sustainable Development and Socially Responsible Investing: ABB in 2000 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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Opportunities Sustainable Development and Socially Responsible Investing: ABB in 2000 | 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 are -

Leveraging digital technologies

– Socially Abb 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.

Using analytics as competitive advantage

– Socially Abb 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Socially Abb to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Socially Abb 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.

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. Socially Abb can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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 Socially Abb to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Reforming the budgeting process

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

Better consumer reach

– The expansion of the 5G network will help Socially Abb to increase its market reach. Socially Abb 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.

Developing new processes and practices

– Socially Abb 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Socially Abb is facing challenges because of the dominance of functional experts in the organization. Sustainable Development and Socially Responsible Investing: ABB in 2000 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.

Remote work and new talent hiring opportunities

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

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Socially Abb can use these opportunities to build new business models that can help the communities that Socially Abb operates in. Secondly it can use opportunities from government spending in Global Business sector.

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 Socially Abb in the consumer business. Now Socially Abb 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. Socially Abb 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. Socially Abb 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.

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Threats Sustainable Development and Socially Responsible Investing: ABB in 2000 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Sustainable Development and Socially Responsible Investing: ABB in 2000 are -

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 Socially Abb.

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 Socially Abb business can come under increasing regulations regarding data privacy, data security, etc.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sustainable Development and Socially Responsible Investing: ABB in 2000, Socially Abb may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .

Increasing wage structure of Socially Abb

– 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 Socially Abb.

Regulatory challenges

– Socially Abb 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.

Environmental challenges

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

Stagnating economy with rate increase

– Socially Abb 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.

Consumer confidence and its impact on Socially Abb 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 acceleration in Forth Industrial Revolution

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

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Socially Abb 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 .

Shortening product life cycle

– it is one of the major threat that Socially Abb is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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

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Weighted SWOT Analysis of Sustainable Development and Socially Responsible Investing: ABB in 2000 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 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 Socially Abb needs to make to build a sustainable competitive advantage.

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