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 - – digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing household debt because of falling income levels, increasing commodity prices,
challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , 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 -
Learning organization
- Timber Storm 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 Timber Storm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Storm Gudrun: Managing a Crisis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Organizational Resilience of Timber Storm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Timber Storm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Global Business field
– Timber Storm 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 Timber Storm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Timber Storm 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
– Timber Storm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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 -
High bargaining power of channel partners
– Because of the regulatory requirements, Anna Nyberg, Karin Svedberg Helgesson, Gerry Yemen suggests that, Timber Storm 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 Storm Gudrun: Managing a Crisis, it seems that the employees of Timber Storm 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Timber Storm 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.
No frontier risks strategy
– After analyzing the HBR case study Storm Gudrun: Managing a Crisis, 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.
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Timber Storm 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.
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.
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 -
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.
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.
Manufacturing automation
– Timber Storm 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.
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 Timber Storm in the consumer business. Now Timber Storm can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Timber Storm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Storm Gudrun: Managing a Crisis 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.
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. Timber Storm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Timber Storm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Timber Storm business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Timber Storm 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Timber Storm 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.
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 .
Consumer confidence and its impact on Timber Storm 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.
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.
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.
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.