FAG Kugelfischer : A German Restructuring SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of FAG Kugelfischer : A German Restructuring
A large German manufacturer of ball bearings and precision machinery experiences severe financial difficulty brought on by poor management practices, an ill-conceived acquisition of a former East German ball-bearings company, and an industry recession. The company hires a German professional turnaround manager who in past turnarounds of German firms has engaged in "U.S.-style" corporate downsizing practices including massive layoffs and asset sales.
Swot Analysis of "FAG Kugelfischer : A German Restructuring" written by Stuart C. Gilson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that German Bearings facing as an external strategic factors. Some of the topics covered in FAG Kugelfischer : A German Restructuring case study are - Strategic Management Strategies, Communication, Corporate communications, Corporate governance, Crisis management, Downsizing, Economy, International business, Mergers & acquisitions, Operations management, Organizational structure, Reorganization, Strategic planning and Finance & Accounting.
Some of the macro environment factors that can be used to understand the FAG Kugelfischer : A German Restructuring casestudy better are - – increasing commodity prices, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, technology disruption, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of FAG Kugelfischer : A German Restructuring
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in FAG Kugelfischer : A German Restructuring case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the German Bearings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which German Bearings 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 FAG Kugelfischer : A German Restructuring can be done for the following purposes –
1. Strategic planning using facts provided in FAG Kugelfischer : A German Restructuring case study
2. Improving business portfolio management of German Bearings
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of German Bearings
Strengths FAG Kugelfischer : A German Restructuring | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of German Bearings in FAG Kugelfischer : A German Restructuring Harvard Business Review case study are -
High brand equity
– German Bearings has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled German Bearings to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– German Bearings is present in almost all the verticals within the industry. This has provided firm in FAG Kugelfischer : A German Restructuring 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.
Ability to lead change in Finance & Accounting field
– German Bearings 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 German Bearings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– German Bearings is one of the leading recruiters in the industry. Managers in the FAG Kugelfischer : A German Restructuring 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 Finance & Accounting segment
- digital transformation varies from industry to industry. For German Bearings digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. German Bearings 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.
Low bargaining power of suppliers
– Suppliers of German Bearings in the sector have low bargaining power. FAG Kugelfischer : A German Restructuring has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps German Bearings to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the FAG Kugelfischer : A German Restructuring 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.
Learning organization
- German Bearings 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 German Bearings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in FAG Kugelfischer : A German Restructuring Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– German Bearings 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 Stuart C. Gilson 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.
Successful track record of launching new products
– German Bearings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. German Bearings 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.
Innovation driven organization
– German Bearings is one of the most innovative firm in sector. Manager in FAG Kugelfischer : A German Restructuring Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– German Bearings 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 FAG Kugelfischer : A German Restructuring HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses FAG Kugelfischer : A German Restructuring | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FAG Kugelfischer : A German Restructuring are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study FAG Kugelfischer : A German Restructuring, it seems that the employees of German Bearings 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, Stuart C. Gilson suggests that, German Bearings 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study FAG Kugelfischer : A German Restructuring, is just above the industry average. German Bearings 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.
Lack of clear differentiation of German Bearings products
– To increase the profitability and margins on the products, German Bearings needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, German Bearings 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.
High operating costs
– Compare to the competitors, firm in the HBR case study FAG Kugelfischer : A German Restructuring 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 German Bearings 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, German Bearings 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. German Bearings 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.
High cash cycle compare to competitors
German Bearings 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.
Capital Spending Reduction
– Even during the low interest decade, German Bearings has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Products dominated business model
– Even though German Bearings 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 - FAG Kugelfischer : A German Restructuring should strive to include more intangible value offerings along with its core products and services.
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 German Bearings supply chain. Even after few cautionary changes mentioned in the HBR case study - FAG Kugelfischer : A German Restructuring, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left German Bearings vulnerable to further global disruptions in South East Asia.
Opportunities FAG Kugelfischer : A German Restructuring | 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 FAG Kugelfischer : A German Restructuring are -
Developing new processes and practices
– German Bearings can develop new processes and procedures in Finance & Accounting 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.
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 German Bearings in the consumer business. Now German Bearings can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. German Bearings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– German Bearings 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 FAG Kugelfischer : A German Restructuring - to build a competitive advantage using analytics. The analytics driven competitive advantage can help German Bearings to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of German Bearings has opened avenues for new revenue streams for the organization in the industry. This can help German Bearings to build a more holistic ecosystem as suggested in the FAG Kugelfischer : A German Restructuring case study. German Bearings can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, German Bearings 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, FAG Kugelfischer : A German Restructuring, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for German Bearings in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Manufacturing automation
– German Bearings can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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 German Bearings to increase its market reach. German Bearings 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. German Bearings can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– German Bearings can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. FAG Kugelfischer : A German Restructuring 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, German Bearings is facing challenges because of the dominance of functional experts in the organization. FAG Kugelfischer : A German Restructuring 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for German Bearings 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 German Bearings to hire the very best people irrespective of their geographical location.
Threats FAG Kugelfischer : A German Restructuring External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study FAG Kugelfischer : A German Restructuring are -
Stagnating economy with rate increase
– German Bearings 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, German Bearings 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 FAG Kugelfischer : A German Restructuring .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents German Bearings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study FAG Kugelfischer : A German Restructuring, German Bearings may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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 German Bearings in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of German Bearings
– 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 German Bearings.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for German Bearings in the Finance & Accounting industry. The Finance & Accounting 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.
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.
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. German Bearings needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. German Bearings will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– German Bearings 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. German Bearings can take advantage of this fund but it will also bring new competitors in the Finance & Accounting 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.
Shortening product life cycle
– it is one of the major threat that German Bearings is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of FAG Kugelfischer : A German Restructuring 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 FAG Kugelfischer : A German Restructuring 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 FAG Kugelfischer : A German Restructuring 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 FAG Kugelfischer : A German Restructuring 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 FAG Kugelfischer : A German Restructuring 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 German Bearings needs to make to build a sustainable competitive advantage.
