United Technologies Corporation: Supplier Development Initiative SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of United Technologies Corporation: Supplier Development Initiative
In mid-2000, United Technologies Corporation (UTC) was two years into a supplier development integration program. The major focus of this initiative was to strengthen relationships with "key" suppliers to fully leverage the supply chain. The qualities sought in the relationships included long-term commitments, confidential information sharing, cooperative continuous improvement efforts, and sharing risks and rewards. Both the nature of these relationships and the associated behaviors were new for UTC and represented a significant challenge. UTC believed it was making progress moving from supplier rationalization toward supplier integration. However, some UTC suppliers believed that they were not receiving any of the gains from these initiatives and viewed UTC as often focused only on cost cutting. UTC's Global Supply Management organization hoped to investigate individual supplier relationships and address supplier concerns. The objective was to assist high-potential suppliers so that they could improve their performance and, at the same time, align better with UTC's goals for a more productive and less costly set of reliable supply chain partners.
Swot Analysis of "United Technologies Corporation: Supplier Development Initiative" written by Robert E. Spekman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Utc Supplier facing as an external strategic factors. Some of the topics covered in United Technologies Corporation: Supplier Development Initiative case study are - Strategic Management Strategies, and Communication.
Some of the macro environment factors that can be used to understand the United Technologies Corporation: Supplier Development Initiative casestudy better are - – talent flight as more people leaving formal jobs, technology disruption, increasing commodity prices, cloud computing is disrupting traditional business models, there is backlash against globalization, increasing energy prices, supply chains are disrupted by pandemic ,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of United Technologies Corporation: Supplier Development Initiative
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in United Technologies Corporation: Supplier Development Initiative case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Utc Supplier, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Utc Supplier 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 United Technologies Corporation: Supplier Development Initiative can be done for the following purposes –
1. Strategic planning using facts provided in United Technologies Corporation: Supplier Development Initiative case study
2. Improving business portfolio management of Utc Supplier
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Utc Supplier
Strengths United Technologies Corporation: Supplier Development Initiative | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Utc Supplier in United Technologies Corporation: Supplier Development Initiative Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Utc Supplier in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Utc Supplier in the sector have low bargaining power. United Technologies Corporation: Supplier Development Initiative has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Utc Supplier to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Utc Supplier 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.
Highly skilled collaborators
– Utc Supplier 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 United Technologies Corporation: Supplier Development Initiative HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Communication industry
– United Technologies Corporation: Supplier Development Initiative firm has clearly differentiated products in the market place. This has enabled Utc Supplier to fetch slight price premium compare to the competitors in the Communication industry. The sustainable margins have also helped Utc Supplier to invest into research and development (R&D) and innovation.
Learning organization
- Utc Supplier 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 Utc Supplier is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in United Technologies Corporation: Supplier Development Initiative Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Communication field
– Utc Supplier 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 Utc Supplier in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Utc Supplier 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 Robert E. Spekman 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.
Strong track record of project management
– Utc Supplier 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
– Utc Supplier is present in almost all the verticals within the industry. This has provided firm in United Technologies Corporation: Supplier Development Initiative 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 United Technologies Corporation: Supplier Development Initiative 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 brand equity
– Utc Supplier has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Utc Supplier to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses United Technologies Corporation: Supplier Development Initiative | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of United Technologies Corporation: Supplier Development Initiative are -
Slow decision making process
– As mentioned earlier in the report, Utc Supplier 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. Utc Supplier 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.
Need for greater diversity
– Utc Supplier 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.
No frontier risks strategy
– After analyzing the HBR case study United Technologies Corporation: Supplier Development Initiative, it seems that company is thinking about the frontier risks that can impact Communication 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.
Skills based hiring
– The stress on hiring functional specialists at Utc Supplier 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.
Increasing silos among functional specialists
– The organizational structure of Utc Supplier is dominated by functional specialists. It is not different from other players in the Communication segment. Utc Supplier needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Utc Supplier to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Utc Supplier products
– To increase the profitability and margins on the products, Utc Supplier needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Utc Supplier is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study United Technologies Corporation: Supplier Development Initiative can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Utc Supplier 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study United Technologies Corporation: Supplier Development Initiative, it seems that the employees of Utc Supplier don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study United Technologies Corporation: Supplier Development Initiative, is just above the industry average. Utc Supplier 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.
High operating costs
– Compare to the competitors, firm in the HBR case study United Technologies Corporation: Supplier Development Initiative 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 Utc Supplier 's lucrative customers.
Opportunities United Technologies Corporation: Supplier Development Initiative | 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 United Technologies Corporation: Supplier Development Initiative are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Utc Supplier 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. Utc Supplier 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.
Better consumer reach
– The expansion of the 5G network will help Utc Supplier to increase its market reach. Utc Supplier 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.
Using analytics as competitive advantage
– Utc Supplier 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 United Technologies Corporation: Supplier Development Initiative - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Utc Supplier to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Utc Supplier can use the latest technology developments to improve its manufacturing and designing process in Communication 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Utc Supplier is facing challenges because of the dominance of functional experts in the organization. United Technologies Corporation: Supplier Development Initiative 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.
Loyalty marketing
– Utc Supplier 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Utc Supplier 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, United Technologies Corporation: Supplier Development Initiative, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communication industry, but it has also influenced the consumer preferences. Utc Supplier can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Utc Supplier can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Utc Supplier can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Utc Supplier in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communication segment, and it will provide faster access to the consumers.
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 Utc Supplier 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Utc Supplier 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 Utc Supplier to hire the very best people irrespective of their geographical location.
Threats United Technologies Corporation: Supplier Development Initiative External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study United Technologies Corporation: Supplier Development Initiative are -
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 Utc Supplier with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Utc Supplier in the Communication sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Utc Supplier in the Communication industry. The Communication 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.
Stagnating economy with rate increase
– Utc Supplier 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.
Environmental challenges
– Utc Supplier 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. Utc Supplier can take advantage of this fund but it will also bring new competitors in the Communication industry.
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. Utc Supplier 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.
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Utc Supplier can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Utc Supplier business can come under increasing regulations regarding data privacy, data security, 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 Utc Supplier.
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. Utc Supplier needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Utc Supplier 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 United Technologies Corporation: Supplier Development Initiative .
Regulatory challenges
– Utc Supplier 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 Communication industry regulations.
Weighted SWOT Analysis of United Technologies Corporation: Supplier Development Initiative 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 United Technologies Corporation: Supplier Development Initiative 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 United Technologies Corporation: Supplier Development Initiative 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 United Technologies Corporation: Supplier Development Initiative 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 United Technologies Corporation: Supplier Development Initiative 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 Utc Supplier needs to make to build a sustainable competitive advantage.
