Case Study Description of Southeastern Mills: The Improvement Journey (A)
Appropriate for courses in operations design and performance management. Owners and employees of this company spent considerable effort developing a unique, extremely successful high-performance work place culture based on trust and a decentralized structure and little direct supervision from middle and upper management. Now management wants to consider blending a Lean or Six Sigma program into their work-place culture. A Business Process Improvement Team evaluates four different system designs for launching Lean-Six Sigma. The three-part case series follows the team's investigations, selection criteria development, assessments, and final decision. Students are asked to consider the pros and cons of the alternatives of the team, prepare a recommendation for the senior managers and then critique their choice against the team's recommendation. There is a teaching note (OM-1393TN) available.
Swot Analysis of "Southeastern Mills: The Improvement Journey (A)" written by Robert D. Landel, Rebecca Goldberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sigma Lean facing as an external strategic factors. Some of the topics covered in Southeastern Mills: The Improvement Journey (A) case study are - Strategic Management Strategies, Operations management, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Southeastern Mills: The Improvement Journey (A) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, geopolitical disruptions, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
Introduction to SWOT Analysis of Southeastern Mills: The Improvement Journey (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Southeastern Mills: The Improvement Journey (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sigma Lean, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sigma Lean 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 Southeastern Mills: The Improvement Journey (A) can be done for the following purposes –
1. Strategic planning using facts provided in Southeastern Mills: The Improvement Journey (A) case study
2. Improving business portfolio management of Sigma Lean
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sigma Lean
Strengths Southeastern Mills: The Improvement Journey (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sigma Lean in Southeastern Mills: The Improvement Journey (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Sigma Lean 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 Southeastern Mills: The Improvement Journey (A) - 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 Sigma Lean
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sigma Lean does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Sigma Lean is one of the leading recruiters in the industry. Managers in the Southeastern Mills: The Improvement Journey (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Sigma Lean is present in almost all the verticals within the industry. This has provided firm in Southeastern Mills: The Improvement Journey (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.
Ability to lead change in Leadership & Managing People field
– Sigma Lean 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 Sigma Lean in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Sigma Lean 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.
Innovation driven organization
– Sigma Lean is one of the most innovative firm in sector. Manager in Southeastern Mills: The Improvement Journey (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Sigma Lean digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sigma Lean 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 Leadership & Managing People industry
– Southeastern Mills: The Improvement Journey (A) firm has clearly differentiated products in the market place. This has enabled Sigma Lean to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Sigma Lean to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Sigma Lean has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sigma Lean 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.
Training and development
– Sigma Lean has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Southeastern Mills: The Improvement Journey (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.
Learning organization
- Sigma Lean 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 Sigma Lean is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Southeastern Mills: The Improvement Journey (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Southeastern Mills: The Improvement Journey (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Southeastern Mills: The Improvement Journey (A) are -
Interest costs
– Compare to the competition, Sigma Lean 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 star products
– The top 2 products and services of the firm as mentioned in the Southeastern Mills: The Improvement Journey (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 Sigma Lean has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Southeastern Mills: The Improvement Journey (A), it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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 Sigma Lean products
– To increase the profitability and margins on the products, Sigma Lean needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Sigma Lean is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Sigma Lean needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sigma Lean to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Southeastern Mills: The Improvement Journey (A), in the dynamic environment Sigma Lean has struggled to respond to the nimble upstart competition. Sigma Lean has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Sigma Lean 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Southeastern Mills: The Improvement Journey (A), is just above the industry average. Sigma Lean 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 cash cycle compare to competitors
Sigma Lean 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.
Slow decision making process
– As mentioned earlier in the report, Sigma Lean 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. Sigma Lean 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.
Skills based hiring
– The stress on hiring functional specialists at Sigma Lean 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.
Opportunities Southeastern Mills: The Improvement Journey (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 Southeastern Mills: The Improvement Journey (A) are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sigma Lean can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Sigma Lean 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 Leadership & Managing People segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sigma Lean 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, Southeastern Mills: The Improvement Journey (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.
Using analytics as competitive advantage
– Sigma Lean 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 Southeastern Mills: The Improvement Journey (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sigma Lean to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Sigma Lean can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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 Sigma Lean to increase its market reach. Sigma Lean 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Sigma Lean can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sigma Lean 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 Sigma Lean to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Sigma Lean 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.
Leveraging digital technologies
– Sigma Lean 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 Sigma Lean 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sigma Lean is facing challenges because of the dominance of functional experts in the organization. Southeastern Mills: The Improvement Journey (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.
Developing new processes and practices
– Sigma Lean can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Southeastern Mills: The Improvement Journey (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Southeastern Mills: The Improvement Journey (A) are -
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.
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. Sigma Lean 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.
High dependence on third party suppliers
– Sigma Lean 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.
Stagnating economy with rate increase
– Sigma Lean 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sigma Lean in the Leadership & Managing People industry. The Leadership & Managing People 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sigma Lean 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 Southeastern Mills: The Improvement Journey (A) .
Shortening product life cycle
– it is one of the major threat that Sigma Lean is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Sigma Lean in the Leadership & Managing People sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sigma Lean can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Sigma Lean needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Environmental challenges
– Sigma Lean 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. Sigma Lean can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Consumer confidence and its impact on Sigma Lean 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.
Weighted SWOT Analysis of Southeastern Mills: The Improvement Journey (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 Southeastern Mills: The Improvement Journey (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 Southeastern Mills: The Improvement Journey (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 Southeastern Mills: The Improvement Journey (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 Southeastern Mills: The Improvement Journey (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 Sigma Lean needs to make to build a sustainable competitive advantage.
