Swot Analysis of "IBM-Fujitsu Settlement" written by Joseph L. Badaracco Jr., Ilyse Barkan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fujitsu Ibm facing as an external strategic factors. Some of the topics covered in IBM-Fujitsu Settlement case study are - Strategic Management Strategies, Decision making, Ethics, International business and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the IBM-Fujitsu Settlement casestudy better are - – increasing household debt because of falling income levels, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing energy prices, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy,
challanges to central banks by blockchain based private currencies, technology disruption, etc
Introduction to SWOT Analysis of IBM-Fujitsu Settlement
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in IBM-Fujitsu Settlement case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fujitsu Ibm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fujitsu Ibm 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 IBM-Fujitsu Settlement can be done for the following purposes –
1. Strategic planning using facts provided in IBM-Fujitsu Settlement case study
2. Improving business portfolio management of Fujitsu Ibm
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 Fujitsu Ibm
Strengths IBM-Fujitsu Settlement | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fujitsu Ibm in IBM-Fujitsu Settlement Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– IBM-Fujitsu Settlement firm has clearly differentiated products in the market place. This has enabled Fujitsu Ibm to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Fujitsu Ibm to invest into research and development (R&D) and innovation.
High brand equity
– Fujitsu Ibm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fujitsu Ibm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Fujitsu Ibm is one of the leading recruiters in the industry. Managers in the IBM-Fujitsu Settlement are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Fujitsu Ibm 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 IBM-Fujitsu Settlement - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Fujitsu Ibm is one of the most innovative firm in sector. Manager in IBM-Fujitsu Settlement Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Fujitsu Ibm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Fujitsu Ibm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fujitsu Ibm 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.
Diverse revenue streams
– Fujitsu Ibm is present in almost all the verticals within the industry. This has provided firm in IBM-Fujitsu Settlement 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
– Fujitsu Ibm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in IBM-Fujitsu Settlement 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.
Cross disciplinary teams
– Horizontal connected teams at the Fujitsu Ibm 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.
High switching costs
– The high switching costs that Fujitsu Ibm 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.
Successful track record of launching new products
– Fujitsu Ibm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fujitsu Ibm 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.
Weaknesses IBM-Fujitsu Settlement | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of IBM-Fujitsu Settlement are -
Slow to strategic competitive environment developments
– As IBM-Fujitsu Settlement HBR case study mentions - Fujitsu Ibm 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Fujitsu Ibm needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study IBM-Fujitsu Settlement 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 Fujitsu Ibm 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the IBM-Fujitsu Settlement 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 Fujitsu Ibm has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study IBM-Fujitsu Settlement 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 IBM-Fujitsu Settlement can leverage the sales team experience to cultivate customer relationships as Fujitsu Ibm is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study IBM-Fujitsu Settlement, it seems that the employees of Fujitsu Ibm 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.
Interest costs
– Compare to the competition, Fujitsu Ibm 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.
Increasing silos among functional specialists
– The organizational structure of Fujitsu Ibm is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Fujitsu Ibm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fujitsu Ibm to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Fujitsu Ibm has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study IBM-Fujitsu Settlement, in the dynamic environment Fujitsu Ibm has struggled to respond to the nimble upstart competition. Fujitsu Ibm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Joseph L. Badaracco Jr., Ilyse Barkan suggests that, Fujitsu Ibm 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.
Opportunities IBM-Fujitsu Settlement | 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 IBM-Fujitsu Settlement are -
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. Fujitsu Ibm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fujitsu Ibm 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, IBM-Fujitsu Settlement, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Fujitsu Ibm in the consumer business. Now Fujitsu Ibm can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fujitsu Ibm 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 Fujitsu Ibm to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Fujitsu Ibm to increase its market reach. Fujitsu Ibm 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.
Loyalty marketing
– Fujitsu Ibm 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.
Using analytics as competitive advantage
– Fujitsu Ibm 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 IBM-Fujitsu Settlement - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fujitsu Ibm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Fujitsu Ibm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. IBM-Fujitsu Settlement 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.
Creating value in data economy
– The success of analytics program of Fujitsu Ibm has opened avenues for new revenue streams for the organization in the industry. This can help Fujitsu Ibm to build a more holistic ecosystem as suggested in the IBM-Fujitsu Settlement case study. Fujitsu Ibm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Fujitsu Ibm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Fujitsu Ibm 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. Fujitsu Ibm 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fujitsu Ibm 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fujitsu Ibm is facing challenges because of the dominance of functional experts in the organization. IBM-Fujitsu Settlement 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.
Threats IBM-Fujitsu Settlement External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study IBM-Fujitsu Settlement are -
High dependence on third party suppliers
– Fujitsu Ibm 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. Fujitsu Ibm 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 Fujitsu Ibm business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Fujitsu Ibm 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. Fujitsu Ibm can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People 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. Fujitsu Ibm 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.
Increasing wage structure of Fujitsu Ibm
– 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 Fujitsu Ibm.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study IBM-Fujitsu Settlement, Fujitsu Ibm 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fujitsu Ibm 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 IBM-Fujitsu Settlement .
Regulatory challenges
– Fujitsu Ibm 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fujitsu Ibm 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fujitsu Ibm 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
– Fujitsu Ibm 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.
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 Fujitsu Ibm in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of IBM-Fujitsu Settlement 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 IBM-Fujitsu Settlement 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 IBM-Fujitsu Settlement 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 IBM-Fujitsu Settlement 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 IBM-Fujitsu Settlement 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 Fujitsu Ibm needs to make to build a sustainable competitive advantage.