Sergio Marchionne at Chrysler SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sergio Marchionne at Chrysler
Chrysler recently exited from the bankruptcy process, with U.S. government support and with Sergio Marchionne as CEO. Now was the time to work out how to create synergies with FIAT, how to improve the current manufacturing, product, and distribution-network configuration, and how to define the future product portfolio to compete over the long term. In 2004, Marchionne was appointed CEO of FIAT Group, headquartered in Turin, Italy, when the company had faced a near-hopeless crisis. He performed an extreme makeover and turned the company around. In 2008 the entire global automotive industry had entered a deep crisis; in response FIAT and Chrysler had forged a partnership, and Marchionne now found himself in the same situation again.
Swot Analysis of "Sergio Marchionne at Chrysler" written by Rob Kaplan, Bernardo Bertoldi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Marchionne Fiat facing as an external strategic factors. Some of the topics covered in Sergio Marchionne at Chrysler case study are - Strategic Management Strategies, Organizational culture and Organizational Development.
Some of the macro environment factors that can be used to understand the Sergio Marchionne at Chrysler casestudy better are - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, central banks are concerned over increasing inflation,
technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Sergio Marchionne at Chrysler
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sergio Marchionne at Chrysler case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Marchionne Fiat, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Marchionne Fiat 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 Sergio Marchionne at Chrysler can be done for the following purposes –
1. Strategic planning using facts provided in Sergio Marchionne at Chrysler case study
2. Improving business portfolio management of Marchionne Fiat
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Marchionne Fiat
Strengths Sergio Marchionne at Chrysler | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Marchionne Fiat in Sergio Marchionne at Chrysler Harvard Business Review case study are -
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Marchionne Fiat digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Marchionne Fiat 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.
Ability to recruit top talent
– Marchionne Fiat is one of the leading recruiters in the industry. Managers in the Sergio Marchionne at Chrysler are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Marchionne Fiat has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Marchionne Fiat to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Marchionne Fiat has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sergio Marchionne at Chrysler 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.
Innovation driven organization
– Marchionne Fiat is one of the most innovative firm in sector. Manager in Sergio Marchionne at Chrysler 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 Organizational Development industry
– Sergio Marchionne at Chrysler firm has clearly differentiated products in the market place. This has enabled Marchionne Fiat to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Marchionne Fiat to invest into research and development (R&D) and innovation.
Learning organization
- Marchionne Fiat 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 Marchionne Fiat is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sergio Marchionne at Chrysler Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Marchionne Fiat in the sector have low bargaining power. Sergio Marchionne at Chrysler has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Marchionne Fiat to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Marchionne Fiat 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 Sergio Marchionne at Chrysler HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Marchionne Fiat
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Marchionne Fiat does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Marchionne Fiat has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Marchionne Fiat 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.
Ability to lead change in Organizational Development field
– Marchionne Fiat 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 Marchionne Fiat in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Sergio Marchionne at Chrysler | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sergio Marchionne at Chrysler are -
Need for greater diversity
– Marchionne Fiat 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.
Low market penetration in new markets
– Outside its home market of Marchionne Fiat, firm in the HBR case study Sergio Marchionne at Chrysler needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Marchionne Fiat has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Sergio Marchionne at Chrysler should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Marchionne Fiat 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 Marchionne Fiat is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Marchionne Fiat needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Marchionne Fiat to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Marchionne Fiat 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. Marchionne Fiat 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sergio Marchionne at Chrysler, in the dynamic environment Marchionne Fiat has struggled to respond to the nimble upstart competition. Marchionne Fiat has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Marchionne Fiat 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Marchionne Fiat is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sergio Marchionne at Chrysler can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sergio Marchionne at Chrysler, it seems that the employees of Marchionne Fiat 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.
Aligning sales with marketing
– It come across in the case study Sergio Marchionne at Chrysler 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 Sergio Marchionne at Chrysler can leverage the sales team experience to cultivate customer relationships as Marchionne Fiat is planning to shift buying processes online.
Opportunities Sergio Marchionne at Chrysler | 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 Sergio Marchionne at Chrysler are -
Better consumer reach
– The expansion of the 5G network will help Marchionne Fiat to increase its market reach. Marchionne Fiat 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Marchionne Fiat 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 Marchionne Fiat to hire the very best people irrespective of their geographical location.
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 Marchionne Fiat 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.
Loyalty marketing
– Marchionne Fiat 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 Organizational Development industry, but it has also influenced the consumer preferences. Marchionne Fiat can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Marchionne Fiat can develop new processes and procedures in Organizational Development 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.
Learning at scale
– Online learning technologies has now opened space for Marchionne Fiat to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Marchionne Fiat 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Marchionne Fiat can use these opportunities to build new business models that can help the communities that Marchionne Fiat operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Creating value in data economy
– The success of analytics program of Marchionne Fiat has opened avenues for new revenue streams for the organization in the industry. This can help Marchionne Fiat to build a more holistic ecosystem as suggested in the Sergio Marchionne at Chrysler case study. Marchionne Fiat 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. Marchionne Fiat can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Marchionne Fiat 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 Organizational Development segment.
Manufacturing automation
– Marchionne Fiat can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
Threats Sergio Marchionne at Chrysler External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sergio Marchionne at Chrysler are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Marchionne Fiat is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Marchionne Fiat with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Marchionne Fiat needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Marchionne Fiat 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Marchionne Fiat in the Organizational Development industry. The Organizational Development 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.
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 Marchionne Fiat in the Organizational Development sector and impact the bottomline of the organization.
Environmental challenges
– Marchionne Fiat 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. Marchionne Fiat can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Marchionne Fiat 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
– Marchionne Fiat has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Marchionne Fiat needs to keep up with the evolution of technology in the Organizational Development 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.
High dependence on third party suppliers
– Marchionne Fiat 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sergio Marchionne at Chrysler, Marchionne Fiat may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
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 Marchionne Fiat.
Weighted SWOT Analysis of Sergio Marchionne at Chrysler 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 Sergio Marchionne at Chrysler 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 Sergio Marchionne at Chrysler 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 Sergio Marchionne at Chrysler 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 Sergio Marchionne at Chrysler 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 Marchionne Fiat needs to make to build a sustainable competitive advantage.
