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 - – there is increasing trade war between United States & China, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, 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.
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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Euros Bvb digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Euros Bvb 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.
Innovation driven organization
– Euros Bvb is one of the most innovative firm in sector. Manager in Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Leadership & Managing People industry
– Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA firm has clearly differentiated products in the market place. This has enabled Euros Bvb to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Euros Bvb to invest into research and development (R&D) and innovation.
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.
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.
Low bargaining power of suppliers
– Suppliers of Euros Bvb in the sector have low bargaining power. Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Euros Bvb to manage not only supply disruptions but also source products at highly competitive prices.
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.
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 -
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.
Slow decision making process
– As mentioned earlier in the report, Euros Bvb 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. Euros Bvb 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.
No frontier risks strategy
– After analyzing the HBR case study Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA, 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.
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.
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.
Need for greater diversity
– Euros Bvb 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.
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.
Aligning sales with marketing
– It come across in the case study Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA can leverage the sales team experience to cultivate customer relationships as Euros Bvb is planning to shift buying processes online.
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.
Low market penetration in new markets
– Outside its home market of Euros Bvb, firm in the HBR case study Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA, it seems that the employees of Euros Bvb 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.
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 -
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.
Leveraging digital technologies
– Euros Bvb 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.
Manufacturing automation
– Euros Bvb 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.
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.
Loyalty marketing
– Euros Bvb 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Euros Bvb is facing challenges because of the dominance of functional experts in the organization. Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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.
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.
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.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Euros Bvb can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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 -
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.
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.
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 Euros Bvb in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
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. Euros Bvb can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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 Euros Bvb business can come under increasing regulations regarding data privacy, data security, etc.
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 .
Shortening product life cycle
– it is one of the major threat that Euros Bvb is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Euros Bvb has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Euros Bvb 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.
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.
