Rudi Gassner and the Executive Committee of BMG International (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Rudi Gassner and the Executive Committee of BMG International (A)
Explores the roles of CEO Rudi Gassner and the 9-person executive committee in leading BMG International. BMG International is the international music subsidiary of Bertlesmann, a German company that is the second-largest media conglomerate in the world. Describes a 1993 decision that Gassner and the executive committee must make about whether or not to change managers' business plans and bonus targets as a result of a newly negotiate reduced manufacturing cost. Allows for discussion of a number of timely and important issues: 1) the complexities of managing and growing a large global business; 2) the tensions between centralized corporate control and decentralized local management in a global organization; 3) the impact of leadership style on corporate culture and performance; 4) the challenges of leading a senior mangement team; and 5) the final decision by CEO Rudi Gassner and the subsequent actions taken by the members of the executive committee.
Swot Analysis of "Rudi Gassner and the Executive Committee of BMG International (A)" written by Linda A. Hill, Katherine S. Weber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gassner Rudi facing as an external strategic factors. Some of the topics covered in Rudi Gassner and the Executive Committee of BMG International (A) case study are - Strategic Management Strategies, Change management, Corporate communications, Cross-cultural management, Decision making, Growth strategy, Influence, Leadership, Managing people, Organizational culture, Strategic planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Rudi Gassner and the Executive Committee of BMG International (A) casestudy better are - – there is increasing trade war between United States & China, there is backlash against globalization, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, technology disruption, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Rudi Gassner and the Executive Committee of BMG International (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rudi Gassner and the Executive Committee of BMG International (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gassner Rudi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gassner Rudi 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 Rudi Gassner and the Executive Committee of BMG International (A) can be done for the following purposes –
1. Strategic planning using facts provided in Rudi Gassner and the Executive Committee of BMG International (A) case study
2. Improving business portfolio management of Gassner Rudi
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 Gassner Rudi
Strengths Rudi Gassner and the Executive Committee of BMG International (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gassner Rudi in Rudi Gassner and the Executive Committee of BMG International (A) Harvard Business Review case study are -
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Gassner Rudi digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gassner Rudi has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Gassner Rudi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gassner Rudi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Gassner Rudi in the sector have low bargaining power. Rudi Gassner and the Executive Committee of BMG International (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gassner Rudi to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Leadership & Managing People industry
– Rudi Gassner and the Executive Committee of BMG International (A) firm has clearly differentiated products in the market place. This has enabled Gassner Rudi to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Gassner Rudi to invest into research and development (R&D) and innovation.
Learning organization
- Gassner Rudi 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 Gassner Rudi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rudi Gassner and the Executive Committee of BMG International (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Gassner Rudi is one of the most innovative firm in sector. Manager in Rudi Gassner and the Executive Committee of BMG International (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Gassner Rudi 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 Rudi Gassner and the Executive Committee of BMG International (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Gassner Rudi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Rudi Gassner and the Executive Committee of BMG International (A) 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.
Strong track record of project management
– Gassner Rudi is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Gassner Rudi is present in almost all the verticals within the industry. This has provided firm in Rudi Gassner and the Executive Committee of BMG International (A) 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.
Operational resilience
– The operational resilience strategy in the Rudi Gassner and the Executive Committee of BMG International (A) 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.
Effective Research and Development (R&D)
– Gassner Rudi 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 Rudi Gassner and the Executive Committee of BMG International (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Rudi Gassner and the Executive Committee of BMG International (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rudi Gassner and the Executive Committee of BMG International (A) are -
Slow decision making process
– As mentioned earlier in the report, Gassner Rudi 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. Gassner Rudi 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 bargaining power of channel partners
– Because of the regulatory requirements, Linda A. Hill, Katherine S. Weber suggests that, Gassner Rudi 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gassner Rudi is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Rudi Gassner and the Executive Committee of BMG International (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Gassner Rudi 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.
Increasing silos among functional specialists
– The organizational structure of Gassner Rudi is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Gassner Rudi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gassner Rudi 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 Rudi Gassner and the Executive Committee of BMG International (A) 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 Gassner Rudi has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Gassner Rudi, firm in the HBR case study Rudi Gassner and the Executive Committee of BMG International (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Gassner Rudi 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.
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 Gassner Rudi supply chain. Even after few cautionary changes mentioned in the HBR case study - Rudi Gassner and the Executive Committee of BMG International (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gassner Rudi vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Rudi Gassner and the Executive Committee of BMG International (A) 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 Gassner Rudi 's lucrative customers.
Lack of clear differentiation of Gassner Rudi products
– To increase the profitability and margins on the products, Gassner Rudi needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Rudi Gassner and the Executive Committee of BMG International (A) | 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 Rudi Gassner and the Executive Committee of BMG International (A) are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gassner Rudi can use these opportunities to build new business models that can help the communities that Gassner Rudi operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gassner Rudi 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.
Manufacturing automation
– Gassner Rudi 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gassner Rudi 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, Rudi Gassner and the Executive Committee of BMG International (A), 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 Gassner Rudi 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.
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 Gassner Rudi in the consumer business. Now Gassner Rudi can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gassner Rudi is facing challenges because of the dominance of functional experts in the organization. Rudi Gassner and the Executive Committee of BMG International (A) 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.
Better consumer reach
– The expansion of the 5G network will help Gassner Rudi to increase its market reach. Gassner Rudi 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.
Developing new processes and practices
– Gassner Rudi 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.
Leveraging digital technologies
– Gassner Rudi 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gassner Rudi 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gassner Rudi 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 Gassner Rudi to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Gassner Rudi can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Rudi Gassner and the Executive Committee of BMG International (A) 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.
Threats Rudi Gassner and the Executive Committee of BMG International (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rudi Gassner and the Executive Committee of BMG International (A) are -
High dependence on third party suppliers
– Gassner Rudi 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.
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. Gassner Rudi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Gassner Rudi 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. Gassner Rudi can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Regulatory challenges
– Gassner Rudi 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gassner Rudi 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 Rudi Gassner and the Executive Committee of BMG International (A) .
Increasing wage structure of Gassner Rudi
– 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 Gassner Rudi.
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 Gassner Rudi.
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. Gassner Rudi 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.
Shortening product life cycle
– it is one of the major threat that Gassner Rudi is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gassner Rudi 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Rudi Gassner and the Executive Committee of BMG International (A), Gassner Rudi 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 .
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. Gassner Rudi needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Rudi Gassner and the Executive Committee of BMG International (A) 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 Rudi Gassner and the Executive Committee of BMG International (A) 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 Rudi Gassner and the Executive Committee of BMG International (A) 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 Rudi Gassner and the Executive Committee of BMG International (A) 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 Rudi Gassner and the Executive Committee of BMG International (A) 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 Gassner Rudi needs to make to build a sustainable competitive advantage.