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 - – digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, there is backlash against globalization, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -

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.

Operational resilience

– The operational resilience strategy in the Sustainable Development and Socially Responsible Investing: ABB in 2000 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

– Socially Abb 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 Sustainable Development and Socially Responsible Investing: ABB in 2000 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

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.

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.

High switching costs

– The high switching costs that Socially Abb has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Strong track record of project management

– 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.

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.

Organizational Resilience of Socially Abb

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

High brand equity

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

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.

Ability to recruit top talent

– Socially Abb is one of the leading recruiters in the industry. Managers in the Sustainable Development and Socially Responsible Investing: ABB in 2000 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

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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 -

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.

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.

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.

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.

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.

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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Socially Abb is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sustainable Development and Socially Responsible Investing: ABB in 2000 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Need for greater diversity

– Socially Abb 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.

Increasing silos among functional specialists

– The organizational structure of Socially Abb is dominated by functional specialists. It is not different from other players in the Global Business segment. Socially Abb needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Socially Abb to focus more on services rather than just following the product oriented approach.

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.

High cash cycle compare to competitors

Socially Abb 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.

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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 -

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.

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.

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.

Learning at scale

– Online learning technologies has now opened space for Socially Abb 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Socially Abb 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.

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.

Building a culture of innovation

– managers at Socially Abb 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.

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

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.

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.

Buying journey improvements

– Socially Abb can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sustainable Development and Socially Responsible Investing: ABB in 2000 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.

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.

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.

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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 -

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.

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 Socially Abb in the Global Business sector and impact the bottomline of the organization.

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. Socially Abb 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.

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. Socially Abb needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Socially Abb 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

– 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.

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.

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 .

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.

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.

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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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