Case Study Description of Sany's Cross-Border Acquisition, Integration, and Strategic Renewal
In 2012, Germany-based Putzmeister was acquired by China-based SANY, the largest concrete machinery manufacturer in the world. By early 2015, the degree and extent of integration was still incomplete, which put pressure on SANY's management. SANY focused mainly on the Chinese domestic market, whereas Putzmeister had an established brand and good experience in international markets. Should the acquisition integration focus only on Putzmeister, or should it be tied more closely to SANY's strategic renewal? SANY and Putzmeister had launched a "double-brand strategy" in specific markets, but was it the appropriate strategy?
Authors :: Libo Fan, Paul W. Beamish, Bess Huifang Geng
Swot Analysis of "Sany's Cross-Border Acquisition, Integration, and Strategic Renewal" written by Libo Fan, Paul W. Beamish, Bess Huifang Geng includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Putzmeister Sany's facing as an external strategic factors. Some of the topics covered in Sany's Cross-Border Acquisition, Integration, and Strategic Renewal case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Sany's Cross-Border Acquisition, Integration, and Strategic Renewal casestudy better are - – there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy,
central banks are concerned over increasing inflation, technology disruption, etc
Introduction to SWOT Analysis of Sany's Cross-Border Acquisition, Integration, and Strategic Renewal
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sany's Cross-Border Acquisition, Integration, and Strategic Renewal case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Putzmeister Sany's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Putzmeister Sany's 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal can be done for the following purposes –
1. Strategic planning using facts provided in Sany's Cross-Border Acquisition, Integration, and Strategic Renewal case study
2. Improving business portfolio management of Putzmeister Sany's
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 Putzmeister Sany's
Strengths Sany's Cross-Border Acquisition, Integration, and Strategic Renewal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Putzmeister Sany's in Sany's Cross-Border Acquisition, Integration, and Strategic Renewal Harvard Business Review case study are -
Successful track record of launching new products
– Putzmeister Sany's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Putzmeister Sany's 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.
Organizational Resilience of Putzmeister Sany's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Putzmeister Sany's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Putzmeister Sany's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Putzmeister Sany's 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 Putzmeister Sany's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sany's Cross-Border Acquisition, Integration, and Strategic Renewal Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Leadership & Managing People industry
– Sany's Cross-Border Acquisition, Integration, and Strategic Renewal firm has clearly differentiated products in the market place. This has enabled Putzmeister Sany's to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Putzmeister Sany's to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Putzmeister Sany's in the sector have low bargaining power. Sany's Cross-Border Acquisition, Integration, and Strategic Renewal has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Putzmeister Sany's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Putzmeister Sany's 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Putzmeister Sany's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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 lead change in Leadership & Managing People field
– Putzmeister Sany's 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 Putzmeister Sany's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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.
High switching costs
– The high switching costs that Putzmeister Sany's 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.
Diverse revenue streams
– Putzmeister Sany's is present in almost all the verticals within the industry. This has provided firm in Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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.
Weaknesses Sany's Cross-Border Acquisition, Integration, and Strategic Renewal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sany's Cross-Border Acquisition, Integration, and Strategic Renewal are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Putzmeister Sany's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sany's Cross-Border Acquisition, Integration, and Strategic Renewal can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Putzmeister Sany's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Putzmeister Sany's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Putzmeister Sany's to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Putzmeister Sany's, firm in the HBR case study Sany's Cross-Border Acquisition, Integration, and Strategic Renewal needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal can leverage the sales team experience to cultivate customer relationships as Putzmeister Sany's is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sany's Cross-Border Acquisition, Integration, and Strategic Renewal, in the dynamic environment Putzmeister Sany's has struggled to respond to the nimble upstart competition. Putzmeister Sany's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Putzmeister Sany's 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.
No frontier risks strategy
– After analyzing the HBR case study Sany's Cross-Border Acquisition, Integration, and Strategic Renewal, 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal HBR case study mentions - Putzmeister Sany's 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.
Capital Spending Reduction
– Even during the low interest decade, Putzmeister Sany's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Putzmeister Sany's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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 Putzmeister Sany's 's lucrative customers.
Opportunities Sany's Cross-Border Acquisition, Integration, and Strategic Renewal | 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal are -
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 Putzmeister Sany's in the consumer business. Now Putzmeister Sany's can target international markets with far fewer capital restrictions requirements than the existing system.
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 Putzmeister Sany's 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.
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. Putzmeister Sany's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Putzmeister Sany's 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.
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. Putzmeister Sany's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Putzmeister Sany's can use these opportunities to build new business models that can help the communities that Putzmeister Sany's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Putzmeister Sany's 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, Sany's Cross-Border Acquisition, Integration, and Strategic Renewal, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Putzmeister Sany's 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 Putzmeister Sany's to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Putzmeister Sany's 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 Putzmeister Sany's 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.
Learning at scale
– Online learning technologies has now opened space for Putzmeister Sany's 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.
Building a culture of innovation
– managers at Putzmeister Sany's 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.
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. Putzmeister Sany's 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. Putzmeister Sany's 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sany's Cross-Border Acquisition, Integration, and Strategic Renewal are -
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. Putzmeister Sany's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Putzmeister Sany's 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.
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 Putzmeister Sany's in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Putzmeister Sany's 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.
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 Putzmeister Sany's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Putzmeister Sany's 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.
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 Putzmeister Sany's.
Technology acceleration in Forth Industrial Revolution
– Putzmeister Sany's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Putzmeister Sany's 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.
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.
High dependence on third party suppliers
– Putzmeister Sany's 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.
Increasing wage structure of Putzmeister Sany's
– 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 Putzmeister Sany's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Putzmeister Sany's 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal .
Weighted SWOT Analysis of Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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 Putzmeister Sany's needs to make to build a sustainable competitive advantage.