AXA Way: The Pursuit of Excellence Through Quality of Service SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of AXA Way: The Pursuit of Excellence Through Quality of Service
By 2005, AXA had become one of the world's largest and most successful insurance companies, but Claude Brunet, Member of the Management Board, in charge of Transversal Operations, Communication, Marketing and Human Resources, believed that to achieve its ambitions the company was going to have to become much more customer focused. AXA Way, a culture change program that included many elements of Six Sigma philosophy and methodology, was the spearhead of this change. The case describes the AXA Way program, the challenges of its implementation, and how AXA overcame those challenges. Learning objectives: Understand how to manage the culture change necessary to improve customer service using Six Sigma. Six Sigma is sometimes seen as a technical change, as just a methodology, but change in attitude and mindset--in culture--are required for Six Sigma to succeed. Understand how Six Sigma can be successfully adopted in a service industry.
Authors :: John Weeks, Jean-Pierre Baillot, Suzanne Weeks
Swot Analysis of "AXA Way: The Pursuit of Excellence Through Quality of Service" written by John Weeks, Jean-Pierre Baillot, Suzanne Weeks includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Axa Sigma facing as an external strategic factors. Some of the topics covered in AXA Way: The Pursuit of Excellence Through Quality of Service case study are - Strategic Management Strategies, Customer service, Operations management and Global Business.
Some of the macro environment factors that can be used to understand the AXA Way: The Pursuit of Excellence Through Quality of Service casestudy better are - – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, there is backlash against globalization, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of AXA Way: The Pursuit of Excellence Through Quality of Service
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AXA Way: The Pursuit of Excellence Through Quality of Service case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Axa Sigma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Axa Sigma 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 AXA Way: The Pursuit of Excellence Through Quality of Service can be done for the following purposes –
1. Strategic planning using facts provided in AXA Way: The Pursuit of Excellence Through Quality of Service case study
2. Improving business portfolio management of Axa Sigma
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 Axa Sigma
Strengths AXA Way: The Pursuit of Excellence Through Quality of Service | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Axa Sigma in AXA Way: The Pursuit of Excellence Through Quality of Service Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Axa Sigma digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Axa Sigma 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.
Innovation driven organization
– Axa Sigma is one of the most innovative firm in sector. Manager in AXA Way: The Pursuit of Excellence Through Quality of Service Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Axa Sigma 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
– Axa Sigma is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the AXA Way: The Pursuit of Excellence Through Quality of Service 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
– Axa Sigma 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 AXA Way: The Pursuit of Excellence Through Quality of Service HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Axa Sigma 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.
Learning organization
- Axa Sigma 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 Axa Sigma is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AXA Way: The Pursuit of Excellence Through Quality of Service Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Axa Sigma in the sector have low bargaining power. AXA Way: The Pursuit of Excellence Through Quality of Service has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Axa Sigma to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Axa Sigma 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 John Weeks, Jean-Pierre Baillot, Suzanne Weeks 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
– Axa Sigma 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 Axa Sigma in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Axa Sigma has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AXA Way: The Pursuit of Excellence Through Quality of Service 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.
Weaknesses AXA Way: The Pursuit of Excellence Through Quality of Service | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AXA Way: The Pursuit of Excellence Through Quality of Service are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AXA Way: The Pursuit of Excellence Through Quality of Service 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 Axa Sigma has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study AXA Way: The Pursuit of Excellence Through Quality of Service 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 AXA Way: The Pursuit of Excellence Through Quality of Service can leverage the sales team experience to cultivate customer relationships as Axa Sigma is planning to shift buying processes online.
Interest costs
– Compare to the competition, Axa Sigma 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.
High operating costs
– Compare to the competitors, firm in the HBR case study AXA Way: The Pursuit of Excellence Through Quality of Service 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 Axa Sigma 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study AXA Way: The Pursuit of Excellence Through Quality of Service, is just above the industry average. Axa Sigma 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.
Increasing silos among functional specialists
– The organizational structure of Axa Sigma is dominated by functional specialists. It is not different from other players in the Global Business segment. Axa Sigma needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Axa Sigma to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study AXA Way: The Pursuit of Excellence Through Quality of Service, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AXA Way: The Pursuit of Excellence Through Quality of Service, it seems that the employees of Axa Sigma 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 Axa Sigma 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 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 Axa Sigma supply chain. Even after few cautionary changes mentioned in the HBR case study - AXA Way: The Pursuit of Excellence Through Quality of Service, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Axa Sigma vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Axa Sigma products
– To increase the profitability and margins on the products, Axa Sigma needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities AXA Way: The Pursuit of Excellence Through Quality of Service | 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 AXA Way: The Pursuit of Excellence Through Quality of Service are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Axa Sigma is facing challenges because of the dominance of functional experts in the organization. AXA Way: The Pursuit of Excellence Through Quality of Service 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Axa Sigma can use these opportunities to build new business models that can help the communities that Axa Sigma operates in. Secondly it can use opportunities from government spending in Global Business sector.
Better consumer reach
– The expansion of the 5G network will help Axa Sigma to increase its market reach. Axa Sigma 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.
Using analytics as competitive advantage
– Axa Sigma 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 AXA Way: The Pursuit of Excellence Through Quality of Service - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Axa Sigma to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Axa Sigma 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 Axa Sigma 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.
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. Axa Sigma can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Axa Sigma 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Axa Sigma 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.
Leveraging digital technologies
– Axa Sigma 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.
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 Axa Sigma in the consumer business. Now Axa Sigma can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Axa Sigma has opened avenues for new revenue streams for the organization in the industry. This can help Axa Sigma to build a more holistic ecosystem as suggested in the AXA Way: The Pursuit of Excellence Through Quality of Service case study. Axa Sigma can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Axa Sigma 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. Axa Sigma 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.
Threats AXA Way: The Pursuit of Excellence Through Quality of Service External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AXA Way: The Pursuit of Excellence Through Quality of Service are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Axa Sigma 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 AXA Way: The Pursuit of Excellence Through Quality of Service .
High dependence on third party suppliers
– Axa Sigma 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.
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 Axa Sigma 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Axa Sigma 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.
Consumer confidence and its impact on Axa Sigma 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.
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 Axa Sigma.
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 Axa Sigma in the Global Business sector and impact the bottomline of the organization.
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.
Regulatory challenges
– Axa Sigma 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.
Increasing wage structure of Axa Sigma
– 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 Axa Sigma.
Technology acceleration in Forth Industrial Revolution
– Axa Sigma has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Axa Sigma 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.
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. Axa Sigma can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of AXA Way: The Pursuit of Excellence Through Quality of Service 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 AXA Way: The Pursuit of Excellence Through Quality of Service 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 AXA Way: The Pursuit of Excellence Through Quality of Service 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 AXA Way: The Pursuit of Excellence Through Quality of Service 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 AXA Way: The Pursuit of Excellence Through Quality of Service 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 Axa Sigma needs to make to build a sustainable competitive advantage.