Experiment in Public Procurement: Italy Buys in Bulk SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Experiment in Public Procurement: Italy Buys in Bulk
Under pressure from the European Union, which had admitted Italy to the "Eurozone" hesitantly, on condition that the country control its deficit spending and reduce its high public debt, the central government in Italy initiated dozens of cost-cutting programs in the late 1990s and early 2000s. One such program aimed to economize, to the tune of billions of euros, on public procurement of goods and services. The program's first priority was to identify products and services bought widely by public agencies at every level of government, and consolidate them into nation-spanning mega contracts. By aggregating public sector demand in this manner, analysts had reasoned, Italy's public sector could greatly increase its market leverage and win big discounts from suppliers. This appraisal proved correct-but also politically explosive. In November 2003, Italy's Minister of Economy and Finance ordered a temporary halt to the program to give political and administrative leaders a chance to figure out what to do. This decision-forcing case allows students to consider how Italy might have averted this political backlash, and challenges them to propose how the government might adjust the project in ways that address the concerns of the critics, but still allow it to improve procurement efficiency and reduce its costs. HKS Case Number 1925.0
Swot Analysis of "Experiment in Public Procurement: Italy Buys in Bulk" written by Pamela Varley, John D. Donahue includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Italy Public facing as an external strategic factors. Some of the topics covered in Experiment in Public Procurement: Italy Buys in Bulk case study are - Strategic Management Strategies, Globalization, Innovation, IT, Joint ventures, Leadership, Project management, Strategic planning and Global Business.
Some of the macro environment factors that can be used to understand the Experiment in Public Procurement: Italy Buys in Bulk casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, cloud computing is disrupting traditional business models, there is backlash against globalization, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Experiment in Public Procurement: Italy Buys in Bulk
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Experiment in Public Procurement: Italy Buys in Bulk case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Italy Public, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Italy Public 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 Experiment in Public Procurement: Italy Buys in Bulk can be done for the following purposes –
1. Strategic planning using facts provided in Experiment in Public Procurement: Italy Buys in Bulk case study
2. Improving business portfolio management of Italy Public
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 Italy Public
Strengths Experiment in Public Procurement: Italy Buys in Bulk | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Italy Public in Experiment in Public Procurement: Italy Buys in Bulk Harvard Business Review case study are -
Effective Research and Development (R&D)
– Italy Public 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 Experiment in Public Procurement: Italy Buys in Bulk - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Italy Public 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.
High brand equity
– Italy Public has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Italy Public to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Global Business industry
– Experiment in Public Procurement: Italy Buys in Bulk firm has clearly differentiated products in the market place. This has enabled Italy Public to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Italy Public to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Experiment in Public Procurement: Italy Buys in Bulk 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.
Analytics focus
– Italy Public 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 Pamela Varley, John D. Donahue 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.
Low bargaining power of suppliers
– Suppliers of Italy Public in the sector have low bargaining power. Experiment in Public Procurement: Italy Buys in Bulk has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Italy Public to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Italy Public is present in almost all the verticals within the industry. This has provided firm in Experiment in Public Procurement: Italy Buys in Bulk 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.
Learning organization
- Italy Public 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 Italy Public is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Experiment in Public Procurement: Italy Buys in Bulk Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Italy Public 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 Experiment in Public Procurement: Italy Buys in Bulk HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Italy Public is one of the most innovative firm in sector. Manager in Experiment in Public Procurement: Italy Buys in Bulk 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 Italy Public 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 Experiment in Public Procurement: Italy Buys in Bulk | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Experiment in Public Procurement: Italy Buys in Bulk are -
Slow decision making process
– As mentioned earlier in the report, Italy Public 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. Italy Public 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.
Aligning sales with marketing
– It come across in the case study Experiment in Public Procurement: Italy Buys in Bulk 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 Experiment in Public Procurement: Italy Buys in Bulk can leverage the sales team experience to cultivate customer relationships as Italy Public is planning to shift buying processes online.
Lack of clear differentiation of Italy Public products
– To increase the profitability and margins on the products, Italy Public needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Italy Public 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 - Experiment in Public Procurement: Italy Buys in Bulk should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Experiment in Public Procurement: Italy Buys in Bulk, in the dynamic environment Italy Public has struggled to respond to the nimble upstart competition. Italy Public has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Italy Public 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Italy Public is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Experiment in Public Procurement: Italy Buys in Bulk can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Pamela Varley, John D. Donahue suggests that, Italy Public 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 Experiment in Public Procurement: Italy Buys in Bulk, it seems that the employees of Italy Public 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 Italy Public 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.
No frontier risks strategy
– After analyzing the HBR case study Experiment in Public Procurement: Italy Buys in Bulk, 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 Experiment in Public Procurement: Italy Buys in Bulk | 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 Experiment in Public Procurement: Italy Buys in Bulk are -
Manufacturing automation
– Italy Public can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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 Italy Public 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Italy Public is facing challenges because of the dominance of functional experts in the organization. Experiment in Public Procurement: Italy Buys in Bulk 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, Italy Public can use these opportunities to build new business models that can help the communities that Italy Public operates in. Secondly it can use opportunities from government spending in Global Business sector.
Developing new processes and practices
– Italy Public can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Italy Public can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Experiment in Public Procurement: Italy Buys in Bulk 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.
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 Italy Public in the consumer business. Now Italy Public can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Italy Public 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. Italy Public 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.
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. Italy Public can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Italy Public 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.
Learning at scale
– Online learning technologies has now opened space for Italy Public 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.
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. Italy Public can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Italy Public 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, Experiment in Public Procurement: Italy Buys in Bulk, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Experiment in Public Procurement: Italy Buys in Bulk External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Experiment in Public Procurement: Italy Buys in Bulk are -
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. Italy Public 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 Italy Public is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Italy Public 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.
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. Italy Public 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.
Environmental challenges
– Italy Public 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. Italy Public 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, Italy Public 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 Experiment in Public Procurement: Italy Buys in Bulk .
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 Italy Public in the Global Business sector and impact the bottomline of the organization.
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.
Technology acceleration in Forth Industrial Revolution
– Italy Public has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Italy Public 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.
Consumer confidence and its impact on Italy Public 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Italy Public 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.
Regulatory challenges
– Italy Public 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.
Stagnating economy with rate increase
– Italy Public 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.
Weighted SWOT Analysis of Experiment in Public Procurement: Italy Buys in Bulk 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 Experiment in Public Procurement: Italy Buys in Bulk 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 Experiment in Public Procurement: Italy Buys in Bulk 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 Experiment in Public Procurement: Italy Buys in Bulk 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 Experiment in Public Procurement: Italy Buys in Bulk 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 Italy Public needs to make to build a sustainable competitive advantage.