Affärsdefinition i ett konsultföretag - om att skapa rätt förutsättningar för strategisk måluppfyllelse
(2005) MIO920Production Management
- Abstract
- The Swedish technical consultancy firms are today facing a number of exciting challenges. A majority of the firms’ larger customers have already established themselves in the international market. Simultaneously they have also begun to appreciate the need of a closer cooperation with a selected number of their suppliers. Hence, opportunities arise for the technical consultants to take on a larger responsibility, nationally and internationally, for their customers’ product development processes. This, in combination with increasing cost awareness among their customers, forces the consultants to seek new business models and novel strategic solutions. This entails decisions regarding their geographic positioning as well as their methods of... (More)
- The Swedish technical consultancy firms are today facing a number of exciting challenges. A majority of the firms’ larger customers have already established themselves in the international market. Simultaneously they have also begun to appreciate the need of a closer cooperation with a selected number of their suppliers. Hence, opportunities arise for the technical consultants to take on a larger responsibility, nationally and internationally, for their customers’ product development processes. This, in combination with increasing cost awareness among their customers, forces the consultants to seek new business models and novel strategic solutions. This entails decisions regarding their geographic positioning as well as their methods of sale.
A survey of a significant part of the Swedish consultancy firms accentuates the importance of the development presented above. In general, the consultants recognize the need for internationalizing their business. At the same time, they also see the advantages of focusing their business on a fewer number of selected customers. These customers should furthermore only be offered services close to the core business of the consultants.
Semcon consider themselves to be in a favorable position for expanding their business. The observations above create a framework which the management has to take into consideration to be able to conduct this expansion effectively. Thus, a clear need exists for Semcon to divide their limited resources in a suitable manner within the organization and to find a solution as to which customers and which industries will be the most profitable in the future. Also, a decision has to be made as to how these customers should best be served and with which services.
A first answer to these questions can be found in the literature. To reach long-term profitability, theory suggests a focus on, or possibly a related diversification around the core business. This is in line with what the consultants themselves identified as being most important as well. To succeed, it is also imperative that the company’s business definition supports the strategic goals set by the corporate management.
Within these areas Semcon shows a number of substantial shortcomings. Firstly, at present, the company owns two subsidiaries that are not at all related to the rest of the business and hence are not necessary for the company. Secondly, the company is working to increase their international presence through close cooperation with large customers. Sales towards these customers should come in the form of projects. At the same time, another strategic objective is to reduce the large share constituted by Volvo Car Corporation in the company’s customer portfolio. Several risks have been identified as being imminent if this dependence is not reduced.
A couple of factors complicate the fulfillment of the strategic objectives mentioned above. Most importantly, Semcon is today working in parallel according to two different business logics. The increase in large, international customers strived for, is opposed by a continuous presence on the local market serving several small customers. This does not support the development wished for, but instead creates an unnecessary imbalance in the organization.
To improve Semcons chances of growth and internationalization, a number of measures are recommended. The company should focus their business on a fewer number of customers, limit their range of services, give a better support to sales in the form of projects and strive for a more centralized organization. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/2006161
- author
- Gunnarsson, Erik and Matsson, Markus
- supervisor
- organization
- course
- MIO920
- year
- 2005
- type
- M1 - University Diploma
- subject
- keywords
- Corporate strategy, Portfolio evaluation, Risk analysis, Growth strategies, Value-based theory, Core competence
- other publication id
- 05/5222
- language
- Swedish
- id
- 2006161
- date added to LUP
- 2011-06-29 15:12:30
- date last changed
- 2011-06-29 15:12:30
@misc{2006161,
abstract = {{The Swedish technical consultancy firms are today facing a number of exciting challenges. A majority of the firms’ larger customers have already established themselves in the international market. Simultaneously they have also begun to appreciate the need of a closer cooperation with a selected number of their suppliers. Hence, opportunities arise for the technical consultants to take on a larger responsibility, nationally and internationally, for their customers’ product development processes. This, in combination with increasing cost awareness among their customers, forces the consultants to seek new business models and novel strategic solutions. This entails decisions regarding their geographic positioning as well as their methods of sale.
A survey of a significant part of the Swedish consultancy firms accentuates the importance of the development presented above. In general, the consultants recognize the need for internationalizing their business. At the same time, they also see the advantages of focusing their business on a fewer number of selected customers. These customers should furthermore only be offered services close to the core business of the consultants.
Semcon consider themselves to be in a favorable position for expanding their business. The observations above create a framework which the management has to take into consideration to be able to conduct this expansion effectively. Thus, a clear need exists for Semcon to divide their limited resources in a suitable manner within the organization and to find a solution as to which customers and which industries will be the most profitable in the future. Also, a decision has to be made as to how these customers should best be served and with which services.
A first answer to these questions can be found in the literature. To reach long-term profitability, theory suggests a focus on, or possibly a related diversification around the core business. This is in line with what the consultants themselves identified as being most important as well. To succeed, it is also imperative that the company’s business definition supports the strategic goals set by the corporate management.
Within these areas Semcon shows a number of substantial shortcomings. Firstly, at present, the company owns two subsidiaries that are not at all related to the rest of the business and hence are not necessary for the company. Secondly, the company is working to increase their international presence through close cooperation with large customers. Sales towards these customers should come in the form of projects. At the same time, another strategic objective is to reduce the large share constituted by Volvo Car Corporation in the company’s customer portfolio. Several risks have been identified as being imminent if this dependence is not reduced.
A couple of factors complicate the fulfillment of the strategic objectives mentioned above. Most importantly, Semcon is today working in parallel according to two different business logics. The increase in large, international customers strived for, is opposed by a continuous presence on the local market serving several small customers. This does not support the development wished for, but instead creates an unnecessary imbalance in the organization.
To improve Semcons chances of growth and internationalization, a number of measures are recommended. The company should focus their business on a fewer number of customers, limit their range of services, give a better support to sales in the form of projects and strive for a more centralized organization.}},
author = {{Gunnarsson, Erik and Matsson, Markus}},
language = {{swe}},
note = {{Student Paper}},
title = {{Affärsdefinition i ett konsultföretag - om att skapa rätt förutsättningar för strategisk måluppfyllelse}},
year = {{2005}},
}