Case Study Description of Storm Gudrun: Managing a Crisis
A brutal winter storm hits the Baltic Sea region, felling 200 million trees and leaving forest owners and lumber industry competitors devastated. The chairman and majority owner of a large private timber mill in Sweden needs an action plan to pull through the disaster quickly-before the felled timber rots. Will they be able to rescue the timber? How shall his business react to the sudden oversupply? How will the exponentially increased supply be absorbed? What will the short- and long-term effects of the storm be on the timber markets? This case was developed for use in a first-year marketing class on balancing needs, interests, and responsibilities. The material would also work in a class on crisis management.
Authors :: Anna Nyberg, Karin Svedberg Helgesson, Gerry Yemen
Swot Analysis of "Storm Gudrun: Managing a Crisis" written by Anna Nyberg, Karin Svedberg Helgesson, Gerry Yemen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Timber Storm facing as an external strategic factors. Some of the topics covered in Storm Gudrun: Managing a Crisis case study are - Strategic Management Strategies, International business, Joint ventures, Leadership, Marketing, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Storm Gudrun: Managing a Crisis casestudy better are - – increasing household debt because of falling income levels, central banks are concerned over increasing inflation, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, there is increasing trade war between United States & China, wage bills are increasing,
technology disruption, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Storm Gudrun: Managing a Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Storm Gudrun: Managing a Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Timber Storm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Timber Storm 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 Storm Gudrun: Managing a Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Storm Gudrun: Managing a Crisis case study
2. Improving business portfolio management of Timber Storm
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 Timber Storm
Strengths Storm Gudrun: Managing a Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Timber Storm in Storm Gudrun: Managing a Crisis Harvard Business Review case study are -
Innovation driven organization
– Timber Storm is one of the most innovative firm in sector. Manager in Storm Gudrun: Managing a Crisis Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Timber Storm 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.
Ability to recruit top talent
– Timber Storm is one of the leading recruiters in the industry. Managers in the Storm Gudrun: Managing a Crisis are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Timber Storm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Timber Storm is present in almost all the verticals within the industry. This has provided firm in Storm Gudrun: Managing a Crisis 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.
Low bargaining power of suppliers
– Suppliers of Timber Storm in the sector have low bargaining power. Storm Gudrun: Managing a Crisis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Timber Storm to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Timber Storm 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 Storm Gudrun: Managing a Crisis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Storm Gudrun: Managing a Crisis 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.
High brand equity
– Timber Storm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Timber Storm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Timber Storm 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 Anna Nyberg, Karin Svedberg Helgesson, Gerry Yemen 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.
Training and development
– Timber Storm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Storm Gudrun: Managing a Crisis 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)
– Timber Storm 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 Storm Gudrun: Managing a Crisis - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Storm Gudrun: Managing a Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Storm Gudrun: Managing a Crisis are -
Increasing silos among functional specialists
– The organizational structure of Timber Storm is dominated by functional specialists. It is not different from other players in the Global Business segment. Timber Storm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Timber Storm to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Storm Gudrun: Managing a Crisis 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 Storm Gudrun: Managing a Crisis can leverage the sales team experience to cultivate customer relationships as Timber Storm is planning to shift buying processes online.
High cash cycle compare to competitors
Timber Storm 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.
Products dominated business model
– Even though Timber Storm 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 - Storm Gudrun: Managing a Crisis should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Timber Storm 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 decision making process
– As mentioned earlier in the report, Timber Storm 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. Timber Storm 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.
Lack of clear differentiation of Timber Storm products
– To increase the profitability and margins on the products, Timber Storm needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Timber Storm supply chain. Even after few cautionary changes mentioned in the HBR case study - Storm Gudrun: Managing a Crisis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Timber Storm vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Timber Storm, firm in the HBR case study Storm Gudrun: Managing a Crisis needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Timber Storm 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 Storm Gudrun: Managing a Crisis 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 Timber Storm 's lucrative customers.
Opportunities Storm Gudrun: Managing a Crisis | 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 Storm Gudrun: Managing a Crisis are -
Loyalty marketing
– Timber Storm 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.
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 Timber Storm 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Timber Storm 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 Timber Storm to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Timber Storm 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.
Creating value in data economy
– The success of analytics program of Timber Storm has opened avenues for new revenue streams for the organization in the industry. This can help Timber Storm to build a more holistic ecosystem as suggested in the Storm Gudrun: Managing a Crisis case study. Timber Storm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Timber Storm is facing challenges because of the dominance of functional experts in the organization. Storm Gudrun: Managing a Crisis 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.
Building a culture of innovation
– managers at Timber Storm 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Timber Storm 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.
Leveraging digital technologies
– Timber Storm 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Timber Storm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Timber Storm 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. Timber Storm 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 Timber Storm to increase its market reach. Timber Storm 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.
Developing new processes and practices
– Timber Storm 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.
Threats Storm Gudrun: Managing a Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Storm Gudrun: Managing a Crisis are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Timber Storm 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 Storm Gudrun: Managing a Crisis .
Environmental challenges
– Timber Storm 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. Timber Storm can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Timber Storm.
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. Timber Storm needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of Timber Storm
– 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 Timber Storm.
Shortening product life cycle
– it is one of the major threat that Timber Storm is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Timber Storm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Storm Gudrun: Managing a Crisis, Timber Storm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
High dependence on third party suppliers
– Timber Storm 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.
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 Timber Storm in the Global Business sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Timber Storm has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Timber Storm 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.
Weighted SWOT Analysis of Storm Gudrun: Managing a Crisis 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 Storm Gudrun: Managing a Crisis 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 Storm Gudrun: Managing a Crisis 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 Storm Gudrun: Managing a Crisis 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 Storm Gudrun: Managing a Crisis 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 Timber Storm needs to make to build a sustainable competitive advantage.
