Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market
Gorenje D.D. is a kitchen appliance manufacturer located in the small town of Velenje, in Slovenia, a newly independent country that separated from Yugoslavia in 1991. Simultaneous with gaining independence, Slovenia also underwent a change from the unique market socialism that had characterized socialist Yugoslavia to free enterprise capitalism. Furthermore, manufacturing firms in Slovenia had produced largely for the Yugoslav market, whereas after independence they were forced to compete in the wider European market. The company faces new challenges and key decisions in corporate culture, human resources, and competitive strategy to face a turbulent environment.
Authors :: Gerald Zeitz, Ales Brglez, Irena Vodopivec
Swot Analysis of "Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market" written by Gerald Zeitz, Ales Brglez, Irena Vodopivec includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Slovenia Yugoslavia facing as an external strategic factors. Some of the topics covered in Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market case study are - Strategic Management Strategies, Cross-cultural management, Human resource management, Manufacturing and Global Business.
Some of the macro environment factors that can be used to understand the Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Slovenia Yugoslavia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Slovenia Yugoslavia 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market can be done for the following purposes –
1. Strategic planning using facts provided in Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market case study
2. Improving business portfolio management of Slovenia Yugoslavia
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 Slovenia Yugoslavia
Strengths Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Slovenia Yugoslavia in Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market Harvard Business Review case study are -
Innovation driven organization
– Slovenia Yugoslavia is one of the most innovative firm in sector. Manager in Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Slovenia Yugoslavia has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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.
Effective Research and Development (R&D)
– Slovenia Yugoslavia 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market - 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
– Slovenia Yugoslavia 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 Gerald Zeitz, Ales Brglez, Irena Vodopivec 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.
Cross disciplinary teams
– Horizontal connected teams at the Slovenia Yugoslavia 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.
Organizational Resilience of Slovenia Yugoslavia
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Slovenia Yugoslavia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Slovenia Yugoslavia in the sector have low bargaining power. Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Slovenia Yugoslavia to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Slovenia Yugoslavia 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Global Business industry
– Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market firm has clearly differentiated products in the market place. This has enabled Slovenia Yugoslavia to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Slovenia Yugoslavia to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Slovenia Yugoslavia is present in almost all the verticals within the industry. This has provided firm in Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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.
Strong track record of project management
– Slovenia Yugoslavia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market are -
Lack of clear differentiation of Slovenia Yugoslavia products
– To increase the profitability and margins on the products, Slovenia Yugoslavia 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 Slovenia Yugoslavia 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gerald Zeitz, Ales Brglez, Irena Vodopivec suggests that, Slovenia Yugoslavia 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market, it seems that the employees of Slovenia Yugoslavia 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Slovenia Yugoslavia 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market, in the dynamic environment Slovenia Yugoslavia has struggled to respond to the nimble upstart competition. Slovenia Yugoslavia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Slovenia Yugoslavia, firm in the HBR case study Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market can leverage the sales team experience to cultivate customer relationships as Slovenia Yugoslavia is planning to shift buying processes online.
High cash cycle compare to competitors
Slovenia Yugoslavia 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Slovenia Yugoslavia has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market, 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.
Opportunities Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market | 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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. Slovenia Yugoslavia 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. Slovenia Yugoslavia 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.
Better consumer reach
– The expansion of the 5G network will help Slovenia Yugoslavia to increase its market reach. Slovenia Yugoslavia 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.
Building a culture of innovation
– managers at Slovenia Yugoslavia 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.
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 Slovenia Yugoslavia in the consumer business. Now Slovenia Yugoslavia can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Slovenia Yugoslavia 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, Slovenia Yugoslavia is facing challenges because of the dominance of functional experts in the organization. Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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.
Buying journey improvements
– Slovenia Yugoslavia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Slovenia Yugoslavia 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, Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Slovenia Yugoslavia can use these opportunities to build new business models that can help the communities that Slovenia Yugoslavia operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Slovenia Yugoslavia 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.
Using analytics as competitive advantage
– Slovenia Yugoslavia 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Slovenia Yugoslavia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Slovenia Yugoslavia 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 Slovenia Yugoslavia 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 Slovenia Yugoslavia to hire the very best people irrespective of their geographical location.
Threats Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market are -
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.
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 Slovenia Yugoslavia.
Consumer confidence and its impact on Slovenia Yugoslavia 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.
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.
Increasing wage structure of Slovenia Yugoslavia
– 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 Slovenia Yugoslavia.
Regulatory challenges
– Slovenia Yugoslavia 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.
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. Slovenia Yugoslavia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market, Slovenia Yugoslavia 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 .
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. Slovenia Yugoslavia needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Environmental challenges
– Slovenia Yugoslavia 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. Slovenia Yugoslavia can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Stagnating economy with rate increase
– Slovenia Yugoslavia 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Slovenia Yugoslavia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Slovenia Yugoslavia 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.
Weighted SWOT Analysis of Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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 Gorenje D.D.: A Slovenian Manufacturer Confronts the European Market 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 Slovenia Yugoslavia needs to make to build a sustainable competitive advantage.
