Case Study Description of Leadership Crisis at Steelworks' Xiamen Plant
In April 2010, the chief executive officer (CEO) of Steelworks, a Singapore-based metals company recently acquired by an Indian conglomerate, embarked on a plan to realign the organization's structure and processes across its subsidiaries. However, he had difficulty getting the long-serving general manager of a plant in China to sign off on the current year's audited financial statements. This led to a tense and bizarre confrontation between the CEO and the regional general manager. The restructuring project was taking autonomy from regional unit heads. Was that the problem? Was Steelworks mismanaging its subsidiaries? Had the general manager of the Chinese plant, a Singaporean expatriate, been seconded to China for too long? It was unclear how a member of the senior management team who had been with Steelworks for his entire career could behave this way and jeopardize his position. What could the CEO have done differently? Hwee Hoon Tan is affiliated with Lee Kong Chian School of Business.
Swot Analysis of "Leadership Crisis at Steelworks' Xiamen Plant" written by Hwee Hoon Tan, Flocy Joseph includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Steelworks Plant facing as an external strategic factors. Some of the topics covered in Leadership Crisis at Steelworks' Xiamen Plant case study are - Strategic Management Strategies, International business, Leadership, Manufacturing, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Leadership Crisis at Steelworks' Xiamen Plant casestudy better are - – increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
technology disruption, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Leadership Crisis at Steelworks' Xiamen Plant
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Leadership Crisis at Steelworks' Xiamen Plant case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Steelworks Plant, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Steelworks Plant 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 Leadership Crisis at Steelworks' Xiamen Plant can be done for the following purposes –
1. Strategic planning using facts provided in Leadership Crisis at Steelworks' Xiamen Plant case study
2. Improving business portfolio management of Steelworks Plant
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 Steelworks Plant
Strengths Leadership Crisis at Steelworks' Xiamen Plant | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Steelworks Plant in Leadership Crisis at Steelworks' Xiamen Plant Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Leadership Crisis at Steelworks' Xiamen Plant firm has clearly differentiated products in the market place. This has enabled Steelworks Plant to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Steelworks Plant to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Steelworks Plant is present in almost all the verticals within the industry. This has provided firm in Leadership Crisis at Steelworks' Xiamen Plant 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.
Training and development
– Steelworks Plant has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Leadership Crisis at Steelworks' Xiamen Plant 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 recruit top talent
– Steelworks Plant is one of the leading recruiters in the industry. Managers in the Leadership Crisis at Steelworks' Xiamen Plant 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
– Steelworks Plant 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 Steelworks Plant in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Steelworks Plant 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 Leadership Crisis at Steelworks' Xiamen Plant HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Steelworks Plant has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Steelworks Plant 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.
Effective Research and Development (R&D)
– Steelworks Plant 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 Leadership Crisis at Steelworks' Xiamen Plant - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Steelworks Plant 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.
Analytics focus
– Steelworks Plant 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 Hwee Hoon Tan, Flocy Joseph 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 Leadership Crisis at Steelworks' Xiamen Plant 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.
Strong track record of project management
– Steelworks Plant is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Leadership Crisis at Steelworks' Xiamen Plant | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Leadership Crisis at Steelworks' Xiamen Plant are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Leadership Crisis at Steelworks' Xiamen Plant, in the dynamic environment Steelworks Plant has struggled to respond to the nimble upstart competition. Steelworks Plant has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Steelworks Plant, firm in the HBR case study Leadership Crisis at Steelworks' Xiamen Plant needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Leadership Crisis at Steelworks' Xiamen Plant, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Steelworks Plant 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.
Need for greater diversity
– Steelworks Plant 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.
Slow to strategic competitive environment developments
– As Leadership Crisis at Steelworks' Xiamen Plant HBR case study mentions - Steelworks Plant 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.
Aligning sales with marketing
– It come across in the case study Leadership Crisis at Steelworks' Xiamen Plant 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 Leadership Crisis at Steelworks' Xiamen Plant can leverage the sales team experience to cultivate customer relationships as Steelworks Plant is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Hwee Hoon Tan, Flocy Joseph suggests that, Steelworks Plant 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.
Products dominated business model
– Even though Steelworks Plant 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 - Leadership Crisis at Steelworks' Xiamen Plant 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 Steelworks Plant 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Leadership Crisis at Steelworks' Xiamen Plant, is just above the industry average. Steelworks Plant 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.
Opportunities Leadership Crisis at Steelworks' Xiamen Plant | 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 Leadership Crisis at Steelworks' Xiamen Plant are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Steelworks Plant 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.
Buying journey improvements
– Steelworks Plant can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Leadership Crisis at Steelworks' Xiamen Plant 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.
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. Steelworks Plant can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Steelworks Plant 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.
Manufacturing automation
– Steelworks Plant 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.
Loyalty marketing
– Steelworks Plant 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Steelworks Plant 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Steelworks Plant 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 Steelworks Plant to hire the very best people irrespective of their geographical location.
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. Steelworks Plant 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. Steelworks Plant 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 Steelworks Plant 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.
Creating value in data economy
– The success of analytics program of Steelworks Plant has opened avenues for new revenue streams for the organization in the industry. This can help Steelworks Plant to build a more holistic ecosystem as suggested in the Leadership Crisis at Steelworks' Xiamen Plant case study. Steelworks Plant can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Steelworks Plant 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.
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 Steelworks Plant in the consumer business. Now Steelworks Plant can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Leadership Crisis at Steelworks' Xiamen Plant External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Leadership Crisis at Steelworks' Xiamen Plant 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 Steelworks Plant business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Leadership Crisis at Steelworks' Xiamen Plant, Steelworks Plant 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 .
Regulatory challenges
– Steelworks Plant 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.
Stagnating economy with rate increase
– Steelworks Plant 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.
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. Steelworks Plant needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Steelworks Plant has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Steelworks Plant 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.
Environmental challenges
– Steelworks Plant 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. Steelworks Plant can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Steelworks Plant in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Steelworks Plant 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 Leadership Crisis at Steelworks' Xiamen Plant .
Increasing wage structure of Steelworks Plant
– 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 Steelworks Plant.
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.
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 Steelworks Plant.
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. Steelworks Plant can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Leadership Crisis at Steelworks' Xiamen Plant 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 Leadership Crisis at Steelworks' Xiamen Plant 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 Leadership Crisis at Steelworks' Xiamen Plant 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 Leadership Crisis at Steelworks' Xiamen Plant 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 Leadership Crisis at Steelworks' Xiamen Plant 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 Steelworks Plant needs to make to build a sustainable competitive advantage.