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 - – increasing commodity prices, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, wage bills are increasing, cloud computing is disrupting traditional business models, technology disruption, competitive advantages are harder to sustain because of technology dispersion,
increasing government debt because of Covid-19 spendings, there is backlash against globalization, 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 -
Cross disciplinary teams
– Horizontal connected teams at the Putzmeister Sany's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Putzmeister Sany's 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 Libo Fan, Paul W. Beamish, Bess Huifang Geng 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.
Superior customer experience
– The customer experience strategy of Putzmeister Sany's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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.
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.
Ability to recruit top talent
– Putzmeister Sany's is one of the leading recruiters in the industry. Managers in the Sany's Cross-Border Acquisition, Integration, and Strategic Renewal are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
Highly skilled collaborators
– Putzmeister Sany's 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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 -
Need for greater diversity
– Putzmeister Sany's 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.
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 Putzmeister Sany's supply chain. Even after few cautionary changes mentioned in the HBR case study - Sany's Cross-Border Acquisition, Integration, and Strategic Renewal, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Putzmeister Sany's vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Libo Fan, Paul W. Beamish, Bess Huifang Geng suggests that, Putzmeister Sany's 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.
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.
Products dominated business model
– Even though Putzmeister Sany's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Sany's Cross-Border Acquisition, Integration, and Strategic Renewal should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Putzmeister Sany's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow decision making process
– As mentioned earlier in the report, Putzmeister Sany's 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. Putzmeister Sany's 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.
High cash cycle compare to competitors
Putzmeister Sany's 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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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 Putzmeister Sany's has relatively successful track record of launching new products.
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.
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 -
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Putzmeister Sany's is facing challenges because of the dominance of functional experts in the organization. Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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.
Buying journey improvements
– Putzmeister Sany's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sany's Cross-Border Acquisition, Integration, and Strategic Renewal 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Putzmeister Sany's 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.
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.
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.
Leveraging digital technologies
– Putzmeister Sany's 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.
Developing new processes and practices
– Putzmeister Sany's 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.
Creating value in data economy
– The success of analytics program of Putzmeister Sany's has opened avenues for new revenue streams for the organization in the industry. This can help Putzmeister Sany's to build a more holistic ecosystem as suggested in the Sany's Cross-Border Acquisition, Integration, and Strategic Renewal case study. Putzmeister Sany's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Better consumer reach
– The expansion of the 5G network will help Putzmeister Sany's to increase its market reach. Putzmeister Sany's 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.
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.
Using analytics as competitive advantage
– Putzmeister Sany's 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 Sany's Cross-Border Acquisition, Integration, and Strategic Renewal - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Putzmeister Sany's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
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. Putzmeister Sany's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sany's Cross-Border Acquisition, Integration, and Strategic Renewal, Putzmeister Sany's 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 .
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.
Stagnating economy with rate increase
– Putzmeister Sany's 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.
Shortening product life cycle
– it is one of the major threat that Putzmeister Sany's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 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.
Consumer confidence and its impact on Putzmeister Sany's 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.
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.