Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA
In its 100th year of existence in 2009, Borussia Dortmund (BVB) was the only German soccer club listed on the stock exchange. With three days to go before the annual shareholders' meeting on November 24 of that year, the club's managing directors, Thomas Tress and Hans-Joachim Watzke, went through the year-end figures one more time. Although the situation had improved since 2005, when the club was on the brink of insolvency, the closing accounts once again showed a negative net income. After nine years as a publicly traded company, the BVB had to report its fifth loss, this time for 5.9 million Euro, which added up to a cumulative loss of more than 145 million euros. After the passing of a century, many stakeholders were concerned about the way forward. What was the organization's purpose? What was more important, finally making a profit and meeting shareholders' expectations, or playing for the fans and the club's honor? What could the managing directors offer to their shareholders, who had seen the value of their shares drop from 11 euros at the IPO to less than 1 euros in November 2009?
Authors :: Urs Mueller, Ulrich Linnhoff, Bernhard Pellens
Swot Analysis of "Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA" written by Urs Mueller, Ulrich Linnhoff, Bernhard Pellens includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Euros Bvb facing as an external strategic factors. Some of the topics covered in Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA case study are - Strategic Management Strategies, Ethics, Financial analysis, Social responsibility, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing commodity prices, increasing energy prices,
digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Euros Bvb, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Euros Bvb 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA can be done for the following purposes –
1. Strategic planning using facts provided in Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA case study
2. Improving business portfolio management of Euros Bvb
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 Euros Bvb
Strengths Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Euros Bvb in Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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.
Cross disciplinary teams
– Horizontal connected teams at the Euros Bvb 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.
Effective Research and Development (R&D)
– Euros Bvb 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Euros Bvb in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Euros Bvb 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.
Successful track record of launching new products
– Euros Bvb has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Euros Bvb 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.
Ability to lead change in Leadership & Managing People field
– Euros Bvb 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 Euros Bvb in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Euros Bvb 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 Euros Bvb is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Euros Bvb has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Euros Bvb to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Euros Bvb is present in almost all the verticals within the industry. This has provided firm in Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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.
Training and development
– Euros Bvb has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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.
Ability to recruit top talent
– Euros Bvb is one of the leading recruiters in the industry. Managers in the Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA, in the dynamic environment Euros Bvb has struggled to respond to the nimble upstart competition. Euros Bvb has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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 Euros Bvb 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Euros Bvb needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA HBR case study mentions - Euros Bvb 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.
Increasing silos among functional specialists
– The organizational structure of Euros Bvb is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Euros Bvb needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Euros Bvb to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Euros Bvb 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.
Lack of clear differentiation of Euros Bvb products
– To increase the profitability and margins on the products, Euros Bvb needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Euros Bvb 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 - Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Euros Bvb 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 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 Euros Bvb supply chain. Even after few cautionary changes mentioned in the HBR case study - Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Euros Bvb vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Euros Bvb is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA | 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA are -
Creating value in data economy
– The success of analytics program of Euros Bvb has opened avenues for new revenue streams for the organization in the industry. This can help Euros Bvb to build a more holistic ecosystem as suggested in the Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA case study. Euros Bvb can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Euros Bvb 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
– Euros Bvb 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.
Buying journey improvements
– Euros Bvb can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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.
Learning at scale
– Online learning technologies has now opened space for Euros Bvb 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Euros Bvb 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 Euros Bvb to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Euros Bvb 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Euros Bvb can use these opportunities to build new business models that can help the communities that Euros Bvb operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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 Euros Bvb in the consumer business. Now Euros Bvb can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Euros Bvb 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Euros Bvb 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, Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Euros Bvb can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Euros Bvb in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Threats Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Euros Bvb 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 wage structure of Euros Bvb
– 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 Euros Bvb.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Euros Bvb with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Euros Bvb 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA .
High dependence on third party suppliers
– Euros Bvb 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.
Environmental challenges
– Euros Bvb 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. Euros Bvb can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Euros Bvb needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Consumer confidence and its impact on Euros Bvb 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
– Euros Bvb 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.
Stagnating economy with rate increase
– Euros Bvb 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.
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.
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 Euros Bvb.
Weighted SWOT Analysis of Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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 Euros Bvb needs to make to build a sustainable competitive advantage.