Case Study Description of Contract Manufacturing: Dealing with Supply Chain Ethics Challenges
This case describes a number of situations in which important customers of a major electronics manufacturing firm (contract manufacturer) behaved in a manner that could be considered "ethically challenged." The case is told from the perspective of the EMS firm's ECO, who was personally involved in addressing these issues. Issues with three customers are described. All were a significant portion of the EMS firm's overall business. In one, a customer misled the EMS firm about its order receipts, leading to the EMS firm acquiring a substantial excess inventory that the customer was contractually required to pay for. The customer threatened to withdraw its future business if forced to make the payment. A second customer, facing a profit shortfall, demanded a payment for a "warranty problem." The EMS firm faced difficulties with a third customer related to a small R&D firm that it purchased at the customer's request, in order to serve the customer's engineering needs.
Swot Analysis of "Contract Manufacturing: Dealing with Supply Chain Ethics Challenges" written by Michael Marks, David W. Hoyt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ems Customer facing as an external strategic factors. Some of the topics covered in Contract Manufacturing: Dealing with Supply Chain Ethics Challenges case study are - Strategic Management Strategies, Ethics, Manufacturing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Contract Manufacturing: Dealing with Supply Chain Ethics Challenges casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, there is backlash against globalization, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Contract Manufacturing: Dealing with Supply Chain Ethics Challenges
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Contract Manufacturing: Dealing with Supply Chain Ethics Challenges case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ems Customer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ems Customer 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges can be done for the following purposes –
1. Strategic planning using facts provided in Contract Manufacturing: Dealing with Supply Chain Ethics Challenges case study
2. Improving business portfolio management of Ems Customer
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 Ems Customer
Strengths Contract Manufacturing: Dealing with Supply Chain Ethics Challenges | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ems Customer in Contract Manufacturing: Dealing with Supply Chain Ethics Challenges Harvard Business Review case study are -
Organizational Resilience of Ems Customer
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ems Customer does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Leadership & Managing People field
– Ems Customer 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 Ems Customer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Ems Customer is one of the leading recruiters in the industry. Managers in the Contract Manufacturing: Dealing with Supply Chain Ethics Challenges are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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
– Ems Customer has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ems Customer to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Ems Customer 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 Ems Customer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Contract Manufacturing: Dealing with Supply Chain Ethics Challenges Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Ems Customer 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 Michael Marks, David W. Hoyt 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.
Diverse revenue streams
– Ems Customer is present in almost all the verticals within the industry. This has provided firm in Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Ems Customer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ems Customer 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.
Innovation driven organization
– Ems Customer is one of the most innovative firm in sector. Manager in Contract Manufacturing: Dealing with Supply Chain Ethics Challenges Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Leadership & Managing People industry
– Contract Manufacturing: Dealing with Supply Chain Ethics Challenges firm has clearly differentiated products in the market place. This has enabled Ems Customer to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ems Customer to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Ems Customer 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Contract Manufacturing: Dealing with Supply Chain Ethics Challenges | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Contract Manufacturing: Dealing with Supply Chain Ethics Challenges are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Contract Manufacturing: Dealing with Supply Chain Ethics Challenges, it seems that the employees of Ems Customer 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.
Slow to strategic competitive environment developments
– As Contract Manufacturing: Dealing with Supply Chain Ethics Challenges HBR case study mentions - Ems Customer 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.
Skills based hiring
– The stress on hiring functional specialists at Ems Customer 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.
Capital Spending Reduction
– Even during the low interest decade, Ems Customer 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.
Low market penetration in new markets
– Outside its home market of Ems Customer, firm in the HBR case study Contract Manufacturing: Dealing with Supply Chain Ethics Challenges needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ems Customer is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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, Ems Customer 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 bargaining power of channel partners
– Because of the regulatory requirements, Michael Marks, David W. Hoyt suggests that, Ems Customer 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Contract Manufacturing: Dealing with Supply Chain Ethics Challenges, in the dynamic environment Ems Customer has struggled to respond to the nimble upstart competition. Ems Customer has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges can leverage the sales team experience to cultivate customer relationships as Ems Customer is planning to shift buying processes online.
Lack of clear differentiation of Ems Customer products
– To increase the profitability and margins on the products, Ems Customer needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Contract Manufacturing: Dealing with Supply Chain Ethics Challenges | 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges are -
Loyalty marketing
– Ems Customer 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.
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. Ems Customer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Ems Customer can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ems Customer 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.
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. Ems Customer 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. Ems Customer 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ems Customer 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 Ems Customer to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Ems Customer 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ems Customer to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ems Customer is facing challenges because of the dominance of functional experts in the organization. Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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 Ems Customer to increase its market reach. Ems Customer 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.
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 Ems Customer in the consumer business. Now Ems Customer can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Ems Customer has opened avenues for new revenue streams for the organization in the industry. This can help Ems Customer to build a more holistic ecosystem as suggested in the Contract Manufacturing: Dealing with Supply Chain Ethics Challenges case study. Ems Customer can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Ems Customer 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ems Customer can use these opportunities to build new business models that can help the communities that Ems Customer operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Contract Manufacturing: Dealing with Supply Chain Ethics Challenges External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Contract Manufacturing: Dealing with Supply Chain Ethics Challenges are -
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. Ems Customer can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Ems Customer has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ems Customer 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
– Ems Customer 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. Ems Customer can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Ems Customer is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Ems Customer 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ems Customer 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges, Ems Customer 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 .
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 Ems Customer 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 Ems Customer.
Increasing wage structure of Ems Customer
– 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 Ems Customer.
Stagnating economy with rate increase
– Ems Customer 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.
Consumer confidence and its impact on Ems Customer demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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. Ems Customer 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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 Contract Manufacturing: Dealing with Supply Chain Ethics Challenges 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 Ems Customer needs to make to build a sustainable competitive advantage.
