Case Study Description of Federated Co-Operatives Limited: Change Management
In 2013, after almost three years of making organizational changes, the chief executive officer of Federated Co-Operatives Limited (FCL) wondered if he was pushing his unique company through a transformation too quickly or if he was not pushing hard enough to modernize the company. FCL was a co-operative, a remnant of a farmers' purchasing association that had grown to become one of the 50 largest companies in Canada. However, the company's financial success and democratic governance structure had lulled FCL into a situation characterized by outdated processes and systems. Information technology, branding, leadership, and talent management processes needed to be transformed, and a culture change was necessary to move forward. But some employees were resisting, possibly as a result of burnout due to the magnitude of change or the co-operative governance structure that complicated the process of change. The chief executive officer needed to address his employees at a questions and answers session about the progress of the transformation. What should he tell them? Dionne Pohler is affiliated with University of Saskatchewan.
Swot Analysis of "Federated Co-Operatives Limited: Change Management" written by Dionne Pohler includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fcl Federated facing as an external strategic factors. Some of the topics covered in Federated Co-Operatives Limited: Change Management case study are - Strategic Management Strategies, Leadership, Organizational culture, Strategy, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Federated Co-Operatives Limited: Change Management casestudy better are - – geopolitical disruptions, there is backlash against globalization, increasing energy prices, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Federated Co-Operatives Limited: Change Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Federated Co-Operatives Limited: Change Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fcl Federated, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fcl Federated 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 Federated Co-Operatives Limited: Change Management can be done for the following purposes –
1. Strategic planning using facts provided in Federated Co-Operatives Limited: Change Management case study
2. Improving business portfolio management of Fcl Federated
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 Fcl Federated
Strengths Federated Co-Operatives Limited: Change Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fcl Federated in Federated Co-Operatives Limited: Change Management Harvard Business Review case study are -
Learning organization
- Fcl Federated 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 Fcl Federated is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Federated Co-Operatives Limited: Change Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Fcl Federated is one of the most innovative firm in sector. Manager in Federated Co-Operatives Limited: Change Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Fcl Federated in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Fcl Federated 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 Federated Co-Operatives Limited: Change Management - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Fcl Federated 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 Fcl Federated 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
– Fcl Federated is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Fcl Federated 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 Dionne Pohler 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.
Operational resilience
– The operational resilience strategy in the Federated Co-Operatives Limited: Change Management 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.
Low bargaining power of suppliers
– Suppliers of Fcl Federated in the sector have low bargaining power. Federated Co-Operatives Limited: Change Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fcl Federated to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Fcl Federated has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fcl Federated 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Federated Co-Operatives Limited: Change Management firm has clearly differentiated products in the market place. This has enabled Fcl Federated to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Fcl Federated to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Fcl Federated is one of the leading recruiters in the industry. Managers in the Federated Co-Operatives Limited: Change Management 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 Federated Co-Operatives Limited: Change Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Federated Co-Operatives Limited: Change Management are -
Interest costs
– Compare to the competition, Fcl Federated 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Federated Co-Operatives Limited: Change Management 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 Fcl Federated 's lucrative customers.
Slow to strategic competitive environment developments
– As Federated Co-Operatives Limited: Change Management HBR case study mentions - Fcl Federated 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.
Low market penetration in new markets
– Outside its home market of Fcl Federated, firm in the HBR case study Federated Co-Operatives Limited: Change Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Federated Co-Operatives Limited: Change Management, is just above the industry average. Fcl Federated 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Fcl Federated 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 decision making process
– As mentioned earlier in the report, Fcl Federated 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. Fcl Federated 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.
Increasing silos among functional specialists
– The organizational structure of Fcl Federated is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Fcl Federated needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fcl Federated to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Federated Co-Operatives Limited: Change Management, it seems that the employees of Fcl Federated 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Federated Co-Operatives Limited: Change Management HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Fcl Federated has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Dionne Pohler suggests that, Fcl Federated 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.
Opportunities Federated Co-Operatives Limited: Change Management | 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 Federated Co-Operatives Limited: Change Management are -
Manufacturing automation
– Fcl Federated 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.
Creating value in data economy
– The success of analytics program of Fcl Federated has opened avenues for new revenue streams for the organization in the industry. This can help Fcl Federated to build a more holistic ecosystem as suggested in the Federated Co-Operatives Limited: Change Management case study. Fcl Federated can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Fcl Federated to increase its market reach. Fcl Federated will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fcl Federated can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Fcl Federated 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. Fcl Federated 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.
Learning at scale
– Online learning technologies has now opened space for Fcl Federated 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fcl Federated can use these opportunities to build new business models that can help the communities that Fcl Federated operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Leveraging digital technologies
– Fcl Federated 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fcl Federated 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, Federated Co-Operatives Limited: Change Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Fcl Federated 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fcl Federated 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.
Buying journey improvements
– Fcl Federated can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Federated Co-Operatives Limited: Change Management 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.
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. Fcl Federated can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Federated Co-Operatives Limited: Change Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Federated Co-Operatives Limited: Change Management are -
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 Fcl Federated business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fcl Federated 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. Fcl Federated 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 Fcl Federated 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.
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.
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. Fcl Federated can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Fcl Federated has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Fcl Federated 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.
High dependence on third party suppliers
– Fcl Federated 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
– Fcl Federated 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. Fcl Federated can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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 Fcl Federated.
Shortening product life cycle
– it is one of the major threat that Fcl Federated is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Fcl Federated 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.
Weighted SWOT Analysis of Federated Co-Operatives Limited: Change Management 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 Federated Co-Operatives Limited: Change Management 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 Federated Co-Operatives Limited: Change Management 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 Federated Co-Operatives Limited: Change Management 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 Federated Co-Operatives Limited: Change Management 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 Fcl Federated needs to make to build a sustainable competitive advantage.