LG Investments, LLC: A Family Business in Generational Transition (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of LG Investments, LLC: A Family Business in Generational Transition (A)
This case could be used in courses about entrenpreneurship and managing small businesses. The founder and patriarch of a family business is confronted by his children regarding succession, equitable distribution of money from the business to nonworking family members, and nepotism. THe transition from first- to second- and third-generation involvement creates major challenges to the family harmony and the business beyond the life of the founding generation. There is a B case [UV2038] that examines these issues further.
Swot Analysis of "LG Investments, LLC: A Family Business in Generational Transition (A)" written by Edward D. Hess includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Family Entrenpreneurship facing as an external strategic factors. Some of the topics covered in LG Investments, LLC: A Family Business in Generational Transition (A) case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the LG Investments, LLC: A Family Business in Generational Transition (A) casestudy better are - – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, technology disruption, there is backlash against globalization,
increasing household debt because of falling income levels, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of LG Investments, LLC: A Family Business in Generational Transition (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in LG Investments, LLC: A Family Business in Generational Transition (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Family Entrenpreneurship, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Family Entrenpreneurship 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 LG Investments, LLC: A Family Business in Generational Transition (A) can be done for the following purposes –
1. Strategic planning using facts provided in LG Investments, LLC: A Family Business in Generational Transition (A) case study
2. Improving business portfolio management of Family Entrenpreneurship
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Family Entrenpreneurship
Strengths LG Investments, LLC: A Family Business in Generational Transition (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Family Entrenpreneurship in LG Investments, LLC: A Family Business in Generational Transition (A) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Family Entrenpreneurship 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Family Entrenpreneurship digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Family Entrenpreneurship 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.
Analytics focus
– Family Entrenpreneurship 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 Edward D. Hess 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.
Diverse revenue streams
– Family Entrenpreneurship is present in almost all the verticals within the industry. This has provided firm in LG Investments, LLC: A Family Business in Generational Transition (A) 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.
Highly skilled collaborators
– Family Entrenpreneurship 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 LG Investments, LLC: A Family Business in Generational Transition (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Family Entrenpreneurship has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in LG Investments, LLC: A Family Business in Generational Transition (A) 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.
High brand equity
– Family Entrenpreneurship has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Family Entrenpreneurship to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Family Entrenpreneurship has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Family Entrenpreneurship has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Family Entrenpreneurship in the sector have low bargaining power. LG Investments, LLC: A Family Business in Generational Transition (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Family Entrenpreneurship to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Family Entrenpreneurship is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Family Entrenpreneurship in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Family Entrenpreneurship 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 LG Investments, LLC: A Family Business in Generational Transition (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of LG Investments, LLC: A Family Business in Generational Transition (A) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the LG Investments, LLC: A Family Business in Generational Transition (A) 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 Family Entrenpreneurship has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Family Entrenpreneurship 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study LG Investments, LLC: A Family Business in Generational Transition (A), it seems that the employees of Family Entrenpreneurship 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 bargaining power of channel partners
– Because of the regulatory requirements, Edward D. Hess suggests that, Family Entrenpreneurship 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.
High operating costs
– Compare to the competitors, firm in the HBR case study LG Investments, LLC: A Family Business in Generational Transition (A) 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 Family Entrenpreneurship 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Family Entrenpreneurship 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study LG Investments, LLC: A Family Business in Generational Transition (A), is just above the industry average. Family Entrenpreneurship 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 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 Family Entrenpreneurship supply chain. Even after few cautionary changes mentioned in the HBR case study - LG Investments, LLC: A Family Business in Generational Transition (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Family Entrenpreneurship vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Family Entrenpreneurship 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.
Aligning sales with marketing
– It come across in the case study LG Investments, LLC: A Family Business in Generational Transition (A) 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 LG Investments, LLC: A Family Business in Generational Transition (A) can leverage the sales team experience to cultivate customer relationships as Family Entrenpreneurship is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study LG Investments, LLC: A Family Business in Generational Transition (A), in the dynamic environment Family Entrenpreneurship has struggled to respond to the nimble upstart competition. Family Entrenpreneurship has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities LG Investments, LLC: A Family Business in Generational Transition (A) | 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 LG Investments, LLC: A Family Business in Generational Transition (A) are -
Developing new processes and practices
– Family Entrenpreneurship can develop new processes and procedures in Innovation & Entrepreneurship 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.
Leveraging digital technologies
– Family Entrenpreneurship 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.
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 Family Entrenpreneurship 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Family Entrenpreneurship can use these opportunities to build new business models that can help the communities that Family Entrenpreneurship operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Family Entrenpreneurship is facing challenges because of the dominance of functional experts in the organization. LG Investments, LLC: A Family Business in Generational Transition (A) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Family Entrenpreneurship can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Family Entrenpreneurship in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Family Entrenpreneurship 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, Family Entrenpreneurship 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, LG Investments, LLC: A Family Business in Generational Transition (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Family Entrenpreneurship to increase its market reach. Family Entrenpreneurship 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.
Learning at scale
– Online learning technologies has now opened space for Family Entrenpreneurship 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.
Using analytics as competitive advantage
– Family Entrenpreneurship has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study LG Investments, LLC: A Family Business in Generational Transition (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Family Entrenpreneurship to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Family Entrenpreneurship can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. LG Investments, LLC: A Family Business in Generational Transition (A) 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.
Threats LG Investments, LLC: A Family Business in Generational Transition (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study LG Investments, LLC: A Family Business in Generational Transition (A) are -
Regulatory challenges
– Family Entrenpreneurship 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 Innovation & Entrepreneurship industry regulations.
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. Family Entrenpreneurship needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Environmental challenges
– Family Entrenpreneurship 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. Family Entrenpreneurship can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship 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.
Increasing wage structure of Family Entrenpreneurship
– 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 Family Entrenpreneurship.
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 Family Entrenpreneurship.
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.
Stagnating economy with rate increase
– Family Entrenpreneurship 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study LG Investments, LLC: A Family Business in Generational Transition (A), Family Entrenpreneurship may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Shortening product life cycle
– it is one of the major threat that Family Entrenpreneurship is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Family Entrenpreneurship business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Family Entrenpreneurship 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 LG Investments, LLC: A Family Business in Generational Transition (A) .
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. Family Entrenpreneurship 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.
Weighted SWOT Analysis of LG Investments, LLC: A Family Business in Generational Transition (A) 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 LG Investments, LLC: A Family Business in Generational Transition (A) 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 LG Investments, LLC: A Family Business in Generational Transition (A) 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 LG Investments, LLC: A Family Business in Generational Transition (A) 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 LG Investments, LLC: A Family Business in Generational Transition (A) 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 Family Entrenpreneurship needs to make to build a sustainable competitive advantage.
