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 - – geopolitical disruptions, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing commodity prices,
increasing energy prices, wage bills are increasing, 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 -
Organizational Resilience of Euros Bvb
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Euros Bvb does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
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.
Strong track record of project management
– Euros Bvb is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 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.
Highly skilled collaborators
– Euros Bvb 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA 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 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.
Analytics focus
– Euros Bvb 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 Urs Mueller, Ulrich Linnhoff, Bernhard Pellens 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.
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 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.
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.
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.
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 cash cycle compare to competitors
Euros Bvb 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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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. Euros Bvb 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 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.
Using analytics as competitive advantage
– Euros Bvb 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 Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Euros Bvb to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Euros Bvb to increase its market reach. Euros Bvb 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
– 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.
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.
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. Euros Bvb 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. Euros Bvb 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.
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 -
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.
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.
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.
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.
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.
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.
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 .
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA, Euros Bvb 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 .
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.