Harnessing the Best of Globalization SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Harnessing the Best of Globalization
This is an MIT Sloan Management Review Article. The opportunities for businesses to become global are expanding thanks to rapidly emerging product markets, the worldwide race for talent, and the widening impact of digitization. Success stories such as Airbnb Inc. and Uber Technologies Inc. are spurring the imaginations of new entrepreneurs while highlighting the vulnerability of many traditional businesses.In this article, author William R. Kerr, who has researched global ventures for two decades, examines subtle but critical differences in how globalization is leveraged even among organizations that seem on the surface to be quite similar (for example, businesses engaged in outsourcing). Traditional approaches to globalization start with a mindset of taking the company's best products or services to global markets and often use cross-border opportunities to lower costs (what the author describes as "globalizing the best that your company can offer"); the core focus is on how globalization can enhance existing products and profit formulas. However, other organizations, the author notes, build their businesses on top of globalization (what he calls "harnessing the best that the world has to offer"). Such businesses display a sharp external focus, harness the resources and ideas of others, and aspire to achieve a large global footprint quickly. Although the digital economy can enable these ventures, the real differentiator, the author argues, is the managerial approach taken toward the business. In addition to looking at Airbnb and Uber, the article examines the global strategies of several companies, including Upwork Global, Alvogen, Rocket Internet, and Home Essentials (HK) Limited. The article highlights best practices that can support managers in globalizing their businesses, ranging from tailoring the businesses for the local environment to leveraging global network effects. Moreover, it looks at the issue of operational complexity and how considering the trade-offs between the benefits and costs can help managers find the optimal global footprint for their organization. In the author's view, the rapidly evolving nature of globalization means that neither entrepreneurs nor managers can ever fully analyze a global business before they need to act. However, through a simple analysis of globalization plans along these dimensions, entrepreneurs and corporate leaders should be able to develop clearer expectations and decision-making processes.
Swot Analysis of "Harnessing the Best of Globalization" written by William R. Kerr includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Globalization Global facing as an external strategic factors. Some of the topics covered in Harnessing the Best of Globalization case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Harnessing the Best of Globalization casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing commodity prices,
geopolitical disruptions, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Harnessing the Best of Globalization
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Harnessing the Best of Globalization case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Globalization Global, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Globalization Global 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 Harnessing the Best of Globalization can be done for the following purposes –
1. Strategic planning using facts provided in Harnessing the Best of Globalization case study
2. Improving business portfolio management of Globalization Global
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 Globalization Global
Strengths Harnessing the Best of Globalization | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Globalization Global in Harnessing the Best of Globalization Harvard Business Review case study are -
Diverse revenue streams
– Globalization Global is present in almost all the verticals within the industry. This has provided firm in Harnessing the Best of Globalization case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Global Business field
– Globalization Global 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 Globalization Global 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
– Globalization Global has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Globalization Global 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Globalization Global digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Globalization Global 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.
Analytics focus
– Globalization Global 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 William R. Kerr 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.
Operational resilience
– The operational resilience strategy in the Harnessing the Best of Globalization 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.
Sustainable margins compare to other players in Global Business industry
– Harnessing the Best of Globalization firm has clearly differentiated products in the market place. This has enabled Globalization Global to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Globalization Global to invest into research and development (R&D) and innovation.
Strong track record of project management
– Globalization Global is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Globalization Global in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Globalization Global 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 Globalization Global is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Harnessing the Best of Globalization Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Globalization Global 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 Harnessing the Best of Globalization - 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 Globalization Global 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.
Weaknesses Harnessing the Best of Globalization | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Harnessing the Best of Globalization are -
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 Globalization Global supply chain. Even after few cautionary changes mentioned in the HBR case study - Harnessing the Best of Globalization, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Globalization Global vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Harnessing the Best of Globalization, it seems that the employees of Globalization Global 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.
Products dominated business model
– Even though Globalization Global 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 - Harnessing the Best of Globalization 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 Harnessing the Best of Globalization 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 Harnessing the Best of Globalization can leverage the sales team experience to cultivate customer relationships as Globalization Global is planning to shift buying processes online.
Need for greater diversity
– Globalization Global 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Harnessing the Best of Globalization 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 Globalization Global 's lucrative customers.
Slow to strategic competitive environment developments
– As Harnessing the Best of Globalization HBR case study mentions - Globalization Global takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Harnessing the Best of Globalization, is just above the industry average. Globalization Global needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, William R. Kerr suggests that, Globalization Global 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.
Capital Spending Reduction
– Even during the low interest decade, Globalization Global 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.
Increasing silos among functional specialists
– The organizational structure of Globalization Global is dominated by functional specialists. It is not different from other players in the Global Business segment. Globalization Global needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Globalization Global to focus more on services rather than just following the product oriented approach.
Opportunities Harnessing the Best of Globalization | 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 Harnessing the Best of Globalization are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Globalization Global can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Globalization Global 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Globalization Global 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Globalization Global can use these opportunities to build new business models that can help the communities that Globalization Global operates in. Secondly it can use opportunities from government spending in Global Business sector.
Building a culture of innovation
– managers at Globalization Global 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.
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. Globalization Global can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Globalization Global 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.
Using analytics as competitive advantage
– Globalization Global 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 Harnessing the Best of Globalization - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Globalization Global to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Globalization Global can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Harnessing the Best of Globalization 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.
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. Globalization Global 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. Globalization Global 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 Globalization Global to increase its market reach. Globalization Global 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Globalization Global 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 Globalization Global to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Globalization Global 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.
Threats Harnessing the Best of Globalization External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Harnessing the Best of Globalization are -
Technology acceleration in Forth Industrial Revolution
– Globalization Global has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Globalization Global 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.
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 Globalization Global.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Globalization Global 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.
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. Globalization Global can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Environmental challenges
– Globalization Global 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. Globalization Global can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Globalization Global 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 Harnessing the Best of Globalization .
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 Globalization Global
– 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 Globalization Global.
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 Globalization Global in the Global Business sector and impact the bottomline of the organization.
Regulatory challenges
– Globalization Global 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.
Consumer confidence and its impact on Globalization Global 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.
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. Globalization Global 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.
Weighted SWOT Analysis of Harnessing the Best of Globalization 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 Harnessing the Best of Globalization 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 Harnessing the Best of Globalization 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 Harnessing the Best of Globalization 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 Harnessing the Best of Globalization 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 Globalization Global needs to make to build a sustainable competitive advantage.