Bertelsmann - Corporate Structures for Value Creation (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bertelsmann - Corporate Structures for Value Creation (A)
Case A: This case exposes the growing pains of an older, brick-and-mortar, company as it attempts to join the New Economy. The focus is on synergy; pushed by converging technologies and managed by a young and energetic leader, Bertelsmann attempts to overcome a history of decentralization to create a more integrated and Internet savvy corporation.
Swot Analysis of "Bertelsmann - Corporate Structures for Value Creation (A)" written by Jean-Louis Barsoux, D. Charles Galunic includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bertelsmann Attempts facing as an external strategic factors. Some of the topics covered in Bertelsmann - Corporate Structures for Value Creation (A) case study are - Strategic Management Strategies, Corporate governance, Internet, Leadership, Mergers & acquisitions, Organizational structure and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Bertelsmann - Corporate Structures for Value Creation (A) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, wage bills are increasing, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing energy prices,
there is increasing trade war between United States & China, geopolitical disruptions, etc
Introduction to SWOT Analysis of Bertelsmann - Corporate Structures for Value Creation (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bertelsmann - Corporate Structures for Value Creation (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bertelsmann Attempts, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bertelsmann Attempts 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 Bertelsmann - Corporate Structures for Value Creation (A) can be done for the following purposes –
1. Strategic planning using facts provided in Bertelsmann - Corporate Structures for Value Creation (A) case study
2. Improving business portfolio management of Bertelsmann Attempts
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 Bertelsmann Attempts
Strengths Bertelsmann - Corporate Structures for Value Creation (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bertelsmann Attempts in Bertelsmann - Corporate Structures for Value Creation (A) Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Bertelsmann - Corporate Structures for Value Creation (A) firm has clearly differentiated products in the market place. This has enabled Bertelsmann Attempts to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Bertelsmann Attempts to invest into research and development (R&D) and innovation.
Learning organization
- Bertelsmann Attempts 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 Bertelsmann Attempts is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bertelsmann - Corporate Structures for Value Creation (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Bertelsmann Attempts 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 Bertelsmann - Corporate Structures for Value Creation (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.
Successful track record of launching new products
– Bertelsmann Attempts has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bertelsmann Attempts 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.
Operational resilience
– The operational resilience strategy in the Bertelsmann - Corporate Structures for Value Creation (A) 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.
Analytics focus
– Bertelsmann Attempts 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 Jean-Louis Barsoux, D. Charles Galunic 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.
Strong track record of project management
– Bertelsmann Attempts is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Bertelsmann Attempts has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bertelsmann Attempts to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Bertelsmann Attempts 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 Bertelsmann - Corporate Structures for Value Creation (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Bertelsmann Attempts digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bertelsmann Attempts 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.
Ability to lead change in Leadership & Managing People field
– Bertelsmann Attempts 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 Bertelsmann Attempts in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Bertelsmann Attempts has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bertelsmann - Corporate Structures for Value Creation (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.
Weaknesses Bertelsmann - Corporate Structures for Value Creation (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bertelsmann - Corporate Structures for Value Creation (A) are -
Aligning sales with marketing
– It come across in the case study Bertelsmann - Corporate Structures for Value Creation (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Bertelsmann - Corporate Structures for Value Creation (A) can leverage the sales team experience to cultivate customer relationships as Bertelsmann Attempts is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Bertelsmann Attempts 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Bertelsmann - Corporate Structures for Value Creation (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bertelsmann Attempts 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bertelsmann - Corporate Structures for Value Creation (A), it seems that the employees of Bertelsmann Attempts 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.
Increasing silos among functional specialists
– The organizational structure of Bertelsmann Attempts is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Bertelsmann Attempts needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bertelsmann Attempts to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Bertelsmann Attempts 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.
Skills based hiring
– The stress on hiring functional specialists at Bertelsmann Attempts 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bertelsmann Attempts is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bertelsmann - Corporate Structures for Value Creation (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Bertelsmann Attempts, firm in the HBR case study Bertelsmann - Corporate Structures for Value Creation (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Jean-Louis Barsoux, D. Charles Galunic suggests that, Bertelsmann Attempts 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 Bertelsmann - Corporate Structures for Value Creation (A), is just above the industry average. Bertelsmann Attempts 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 Bertelsmann - Corporate Structures for Value Creation (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 Bertelsmann - Corporate Structures for Value Creation (A) are -
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. Bertelsmann Attempts 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. Bertelsmann Attempts 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bertelsmann Attempts is facing challenges because of the dominance of functional experts in the organization. Bertelsmann - Corporate Structures for Value Creation (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.
Better consumer reach
– The expansion of the 5G network will help Bertelsmann Attempts to increase its market reach. Bertelsmann Attempts 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
– Bertelsmann Attempts can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bertelsmann - Corporate Structures for Value Creation (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bertelsmann Attempts 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 Bertelsmann Attempts 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.
Creating value in data economy
– The success of analytics program of Bertelsmann Attempts has opened avenues for new revenue streams for the organization in the industry. This can help Bertelsmann Attempts to build a more holistic ecosystem as suggested in the Bertelsmann - Corporate Structures for Value Creation (A) case study. Bertelsmann Attempts can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Bertelsmann Attempts 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 Bertelsmann - Corporate Structures for Value Creation (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bertelsmann Attempts to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Bertelsmann Attempts 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bertelsmann Attempts 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, Bertelsmann - Corporate Structures for Value Creation (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.
Developing new processes and practices
– Bertelsmann Attempts 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.
Loyalty marketing
– Bertelsmann Attempts has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bertelsmann Attempts can use these opportunities to build new business models that can help the communities that Bertelsmann Attempts operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Bertelsmann - Corporate Structures for Value Creation (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bertelsmann - Corporate Structures for Value Creation (A) are -
Stagnating economy with rate increase
– Bertelsmann Attempts 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
– Bertelsmann Attempts 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bertelsmann Attempts 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bertelsmann - Corporate Structures for Value Creation (A), Bertelsmann Attempts 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 .
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. Bertelsmann Attempts 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.
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. Bertelsmann Attempts can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bertelsmann Attempts with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Bertelsmann Attempts is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Bertelsmann Attempts business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Bertelsmann Attempts
– 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 Bertelsmann Attempts.
Consumer confidence and its impact on Bertelsmann Attempts 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 Bertelsmann - Corporate Structures for Value Creation (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 Bertelsmann - Corporate Structures for Value Creation (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 Bertelsmann - Corporate Structures for Value Creation (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 Bertelsmann - Corporate Structures for Value Creation (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 Bertelsmann - Corporate Structures for Value Creation (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 Bertelsmann Attempts needs to make to build a sustainable competitive advantage.
