Johansen's: The New Scorecard System SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Johansen's: The New Scorecard System
Regional and corporate managers at Johansen's, a large high-end department store, are preparing to attend the company's annual performance summit, at which the performance of each of the company's store managers is reviewed and rated. The company has just completed its first year under a new scorecard system for evaluation of manager performance. The manager of Store 51 has traditionally been one of the company's top-performing managers from a financial standpoint, but his overall performance rating has declined due to performance along nonfinancial dimensions. The managers at the performance summit must discuss his performance in the context of a new performance evaluation system, measurement issues around the nonfinancial metrics, and retention concerns. Students engage in a role-playing exercise. They are assigned specific management roles and debate the evaluation of the performance of Store 51's manager while at the performance summit.
Authors :: Luann J. Lynch, Jennifer Forman, Graham Gillam
Swot Analysis of "Johansen's: The New Scorecard System" written by Luann J. Lynch, Jennifer Forman, Graham Gillam includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Performance Summit facing as an external strategic factors. Some of the topics covered in Johansen's: The New Scorecard System case study are - Strategic Management Strategies, Assessing performance, Balanced scorecard and Global Business.
Some of the macro environment factors that can be used to understand the Johansen's: The New Scorecard System casestudy better are - – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing energy prices, increasing commodity prices,
technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Johansen's: The New Scorecard System
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Johansen's: The New Scorecard System case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Performance Summit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Performance Summit 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 Johansen's: The New Scorecard System can be done for the following purposes –
1. Strategic planning using facts provided in Johansen's: The New Scorecard System case study
2. Improving business portfolio management of Performance Summit
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 Performance Summit
Strengths Johansen's: The New Scorecard System | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Performance Summit in Johansen's: The New Scorecard System Harvard Business Review case study are -
Ability to recruit top talent
– Performance Summit is one of the leading recruiters in the industry. Managers in the Johansen's: The New Scorecard System are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Performance Summit digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Performance Summit 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.
High brand equity
– Performance Summit has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Performance Summit to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Performance Summit 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 Luann J. Lynch, Jennifer Forman, Graham Gillam 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.
High switching costs
– The high switching costs that Performance Summit 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.
Training and development
– Performance Summit has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Johansen's: The New Scorecard System 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.
Effective Research and Development (R&D)
– Performance Summit 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 Johansen's: The New Scorecard System - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Performance Summit 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 Johansen's: The New Scorecard System HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Performance Summit is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– Johansen's: The New Scorecard System firm has clearly differentiated products in the market place. This has enabled Performance Summit to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Performance Summit to invest into research and development (R&D) and innovation.
Innovation driven organization
– Performance Summit is one of the most innovative firm in sector. Manager in Johansen's: The New Scorecard System Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Performance Summit in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Johansen's: The New Scorecard System | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Johansen's: The New Scorecard System are -
Aligning sales with marketing
– It come across in the case study Johansen's: The New Scorecard System 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 Johansen's: The New Scorecard System can leverage the sales team experience to cultivate customer relationships as Performance Summit is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Johansen's: The New Scorecard System 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 Performance Summit has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Performance Summit, firm in the HBR case study Johansen's: The New Scorecard System needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Performance Summit 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.
Interest costs
– Compare to the competition, Performance Summit 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Johansen's: The New Scorecard System, it seems that the employees of Performance Summit 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.
Slow to strategic competitive environment developments
– As Johansen's: The New Scorecard System HBR case study mentions - Performance Summit 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.
High cash cycle compare to competitors
Performance Summit 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Johansen's: The New Scorecard System, in the dynamic environment Performance Summit has struggled to respond to the nimble upstart competition. Performance Summit has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Johansen's: The New Scorecard System, is just above the industry average. Performance Summit 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 operating costs
– Compare to the competitors, firm in the HBR case study Johansen's: The New Scorecard System 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 Performance Summit 's lucrative customers.
Opportunities Johansen's: The New Scorecard System | 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 Johansen's: The New Scorecard System are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Performance Summit can use these opportunities to build new business models that can help the communities that Performance Summit operates in. Secondly it can use opportunities from government spending in Global Business sector.
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 Performance Summit in the consumer business. Now Performance Summit can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Performance Summit 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.
Developing new processes and practices
– Performance Summit 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Performance Summit 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, Johansen's: The New Scorecard System, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Performance Summit is facing challenges because of the dominance of functional experts in the organization. Johansen's: The New Scorecard System 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.
Manufacturing automation
– Performance Summit 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.
Better consumer reach
– The expansion of the 5G network will help Performance Summit to increase its market reach. Performance Summit 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.
Creating value in data economy
– The success of analytics program of Performance Summit has opened avenues for new revenue streams for the organization in the industry. This can help Performance Summit to build a more holistic ecosystem as suggested in the Johansen's: The New Scorecard System case study. Performance Summit can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Performance Summit 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.
Buying journey improvements
– Performance Summit can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Johansen's: The New Scorecard System 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Performance Summit can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Performance Summit 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 Performance Summit to hire the very best people irrespective of their geographical location.
Threats Johansen's: The New Scorecard System External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Johansen's: The New Scorecard System are -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Performance Summit 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.
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. Performance Summit needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Performance Summit in the Global Business sector and impact the bottomline 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 Performance Summit.
Increasing wage structure of Performance Summit
– 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 Performance Summit.
High dependence on third party suppliers
– Performance Summit 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.
Environmental challenges
– Performance Summit 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. Performance Summit can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Johansen's: The New Scorecard System, Performance Summit 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 .
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 Performance Summit business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Performance Summit 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.
Technology acceleration in Forth Industrial Revolution
– Performance Summit has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Performance Summit 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.
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.
Weighted SWOT Analysis of Johansen's: The New Scorecard System 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 Johansen's: The New Scorecard System 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 Johansen's: The New Scorecard System 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 Johansen's: The New Scorecard System 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 Johansen's: The New Scorecard System 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 Performance Summit needs to make to build a sustainable competitive advantage.