Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals
Responding to the crisis in chemicals in the early 1980's, Allied Chemical (U.S.) and ICI (U.K.) appoint new chairmen to revitalize each company's strategy, culture, and organization. Hennessy, an outsider with a background in managing conglomerates, has strong ideas about Allied's proper strategy. He buys and sells businesses at a terrific clip and shakes up Allied's management, culture, and organization. More of a consensus builder than Hennessy and with a less abrasive management style, Harvey-Jones instigates large organizational and strategic changes at ICI. Allows students to compare the effectiveness of different management styles and leadership and to consider the different roles of a general manager.
Authors :: Christopher A. Bartlett, Robert W. Lightfoot
Swot Analysis of "Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals" written by Christopher A. Bartlett, Robert W. Lightfoot includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hennessy Allied's facing as an external strategic factors. Some of the topics covered in Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals case study are - Strategic Management Strategies, Crisis management, Leadership transitions, Managing people, Organizational culture, Organizational structure and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals casestudy better are - – supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing energy prices, technology disruption, cloud computing is disrupting traditional business models, wage bills are increasing, 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, etc
Introduction to SWOT Analysis of Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hennessy Allied's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hennessy Allied's 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 Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals can be done for the following purposes –
1. Strategic planning using facts provided in Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals case study
2. Improving business portfolio management of Hennessy Allied's
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 Hennessy Allied's
Strengths Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hennessy Allied's in Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals firm has clearly differentiated products in the market place. This has enabled Hennessy Allied's to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Hennessy Allied's to invest into research and development (R&D) and innovation.
Innovation driven organization
– Hennessy Allied's is one of the most innovative firm in sector. Manager in Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Hennessy Allied's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hennessy Allied's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Hennessy Allied's 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 Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Hennessy Allied's 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 Christopher A. Bartlett, Robert W. Lightfoot 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.
Training and development
– Hennessy Allied's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals 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.
Strong track record of project management
– Hennessy Allied's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Hennessy Allied's 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 Hennessy Allied's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals 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.
Diverse revenue streams
– Hennessy Allied's is present in almost all the verticals within the industry. This has provided firm in Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals 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
– Hennessy Allied's 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 Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Hennessy Allied's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hennessy Allied's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals are -
Low market penetration in new markets
– Outside its home market of Hennessy Allied's, firm in the HBR case study Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Hennessy Allied's 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.
Increasing silos among functional specialists
– The organizational structure of Hennessy Allied's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Hennessy Allied's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hennessy Allied's to focus more on services rather than just following the product oriented approach.
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 Hennessy Allied's supply chain. Even after few cautionary changes mentioned in the HBR case study - Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hennessy Allied's vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Hennessy Allied's products
– To increase the profitability and margins on the products, Hennessy Allied's needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals HBR case study mentions - Hennessy Allied's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals, it seems that the employees of Hennessy Allied's 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.
Capital Spending Reduction
– Even during the low interest decade, Hennessy Allied's 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.
Need for greater diversity
– Hennessy Allied's 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.
Skills based hiring
– The stress on hiring functional specialists at Hennessy Allied's 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.
No frontier risks strategy
– After analyzing the HBR case study Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals, 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.
Opportunities Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals | 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 Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Hennessy Allied's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Hennessy Allied's to increase its market reach. Hennessy Allied's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hennessy Allied's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Hennessy Allied's 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.
Developing new processes and practices
– Hennessy Allied's 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.
Using analytics as competitive advantage
– Hennessy Allied's 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 Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hennessy Allied's 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 Hennessy Allied's has opened avenues for new revenue streams for the organization in the industry. This can help Hennessy Allied's to build a more holistic ecosystem as suggested in the Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals case study. Hennessy Allied's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hennessy Allied's 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 Hennessy Allied's to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hennessy Allied's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Hennessy Allied's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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 Hennessy Allied's in the consumer business. Now Hennessy Allied's can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Hennessy Allied's 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.
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. Hennessy Allied's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Hennessy Allied's 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.
Threats Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals, Hennessy Allied's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Shortening product life cycle
– it is one of the major threat that Hennessy Allied's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Hennessy Allied's 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.
Regulatory challenges
– Hennessy Allied's 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 Leadership & Managing People industry regulations.
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 Hennessy Allied's business can come under increasing regulations regarding data privacy, data security, etc.
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. Hennessy Allied's 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.
Stagnating economy with rate increase
– Hennessy Allied's 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.
High dependence on third party suppliers
– Hennessy Allied's 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 Hennessy Allied's
– 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 Hennessy Allied's.
Environmental challenges
– Hennessy Allied's 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. Hennessy Allied's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Hennessy Allied's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Hennessy Allied's needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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. Hennessy Allied's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals 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 Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals 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 Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals 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 Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals 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 Hennessy and Harvey-Jones: Two Responses to the Crisis in Chemicals 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 Hennessy Allied's needs to make to build a sustainable competitive advantage.
