The Fit Organization: How to Create a Continuous-Improvement Culture SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Fit Organization: How to Create a Continuous-Improvement Culture
'Fit' companies don't get that way by accident: they intentionally pursue a course of action that makes them stronger and more agile over time. The author, a long-time consultant to Toyota and an expert on its lean system, presents nine steps to creating a culture of continuous improvement. In the end, he argues, the biggest benefit of embracing this approach is not just improved processes and better-quality outputs: it is the growth and development of your employees-the ones who will make continuous improvement a reality.
Swot Analysis of "The Fit Organization: How to Create a Continuous-Improvement Culture" written by Daniel Markovitz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Continuous Improvement facing as an external strategic factors. Some of the topics covered in The Fit Organization: How to Create a Continuous-Improvement Culture case study are - Strategic Management Strategies, Innovation, Leadership and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the The Fit Organization: How to Create a Continuous-Improvement Culture casestudy better are - – increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, technology disruption, wage bills are increasing, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
there is backlash against globalization, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of The Fit Organization: How to Create a Continuous-Improvement Culture
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Fit Organization: How to Create a Continuous-Improvement Culture case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Continuous Improvement, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Continuous Improvement 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 The Fit Organization: How to Create a Continuous-Improvement Culture can be done for the following purposes –
1. Strategic planning using facts provided in The Fit Organization: How to Create a Continuous-Improvement Culture case study
2. Improving business portfolio management of Continuous Improvement
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 Continuous Improvement
Strengths The Fit Organization: How to Create a Continuous-Improvement Culture | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Continuous Improvement in The Fit Organization: How to Create a Continuous-Improvement Culture Harvard Business Review case study are -
Organizational Resilience of Continuous Improvement
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Continuous Improvement does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Continuous Improvement 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 Daniel Markovitz 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.
Operational resilience
– The operational resilience strategy in the The Fit Organization: How to Create a Continuous-Improvement Culture 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Continuous Improvement digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Continuous Improvement 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– The Fit Organization: How to Create a Continuous-Improvement Culture firm has clearly differentiated products in the market place. This has enabled Continuous Improvement to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Continuous Improvement to invest into research and development (R&D) and innovation.
Learning organization
- Continuous Improvement 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 Continuous Improvement is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Fit Organization: How to Create a Continuous-Improvement Culture Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Continuous Improvement has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Fit Organization: How to Create a Continuous-Improvement Culture 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.
Diverse revenue streams
– Continuous Improvement is present in almost all the verticals within the industry. This has provided firm in The Fit Organization: How to Create a Continuous-Improvement Culture 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.
High switching costs
– The high switching costs that Continuous Improvement 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.
High brand equity
– Continuous Improvement has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Continuous Improvement to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Continuous Improvement has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Continuous Improvement 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.
Cross disciplinary teams
– Horizontal connected teams at the Continuous Improvement 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 The Fit Organization: How to Create a Continuous-Improvement Culture | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Fit Organization: How to Create a Continuous-Improvement Culture are -
Products dominated business model
– Even though Continuous Improvement 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 - The Fit Organization: How to Create a Continuous-Improvement Culture should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Continuous Improvement products
– To increase the profitability and margins on the products, Continuous Improvement needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As The Fit Organization: How to Create a Continuous-Improvement Culture HBR case study mentions - Continuous Improvement takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Continuous Improvement is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Fit Organization: How to Create a Continuous-Improvement Culture can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Continuous Improvement 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.
No frontier risks strategy
– After analyzing the HBR case study The Fit Organization: How to Create a Continuous-Improvement Culture, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
High cash cycle compare to competitors
Continuous Improvement 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.
Interest costs
– Compare to the competition, Continuous Improvement 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.
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 Continuous Improvement supply chain. Even after few cautionary changes mentioned in the HBR case study - The Fit Organization: How to Create a Continuous-Improvement Culture, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Continuous Improvement vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Continuous Improvement 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Fit Organization: How to Create a Continuous-Improvement Culture, is just above the industry average. Continuous Improvement 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.
Opportunities The Fit Organization: How to Create a Continuous-Improvement Culture | 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 The Fit Organization: How to Create a Continuous-Improvement Culture are -
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. Continuous Improvement can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Continuous Improvement 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.
Building a culture of innovation
– managers at Continuous Improvement 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 Innovation & Entrepreneurship segment.
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 Continuous Improvement in the consumer business. Now Continuous Improvement can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Continuous Improvement to increase its market reach. Continuous Improvement 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.
Buying journey improvements
– Continuous Improvement can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Fit Organization: How to Create a Continuous-Improvement Culture 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.
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 Continuous Improvement 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.
Manufacturing automation
– Continuous Improvement can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Using analytics as competitive advantage
– Continuous Improvement 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 The Fit Organization: How to Create a Continuous-Improvement Culture - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Continuous Improvement to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Continuous Improvement can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Continuous Improvement has opened avenues for new revenue streams for the organization in the industry. This can help Continuous Improvement to build a more holistic ecosystem as suggested in the The Fit Organization: How to Create a Continuous-Improvement Culture case study. Continuous Improvement can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Continuous Improvement 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Continuous Improvement can use these opportunities to build new business models that can help the communities that Continuous Improvement operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Threats The Fit Organization: How to Create a Continuous-Improvement Culture External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Fit Organization: How to Create a Continuous-Improvement Culture are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Continuous Improvement with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Continuous Improvement 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.
Technology acceleration in Forth Industrial Revolution
– Continuous Improvement has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Continuous Improvement needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Consumer confidence and its impact on Continuous Improvement 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.
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. Continuous Improvement needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Continuous Improvement in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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 Continuous Improvement in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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.
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 Continuous Improvement.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Continuous Improvement can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Continuous Improvement 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.
Increasing wage structure of Continuous Improvement
– 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 Continuous Improvement.
Shortening product life cycle
– it is one of the major threat that Continuous Improvement is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of The Fit Organization: How to Create a Continuous-Improvement Culture 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 The Fit Organization: How to Create a Continuous-Improvement Culture 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 The Fit Organization: How to Create a Continuous-Improvement Culture 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 The Fit Organization: How to Create a Continuous-Improvement Culture 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 The Fit Organization: How to Create a Continuous-Improvement Culture 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 Continuous Improvement needs to make to build a sustainable competitive advantage.