TrueCar: Transforming The Car Buying Experience SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of TrueCar: Transforming The Car Buying Experience
The case follows Scott Painter and his executive team as they deal with a crisis that threatens the survival of TrueCar, a company founded by Painter to improve consumers' car buying experiences. TrueCar's automotive dealer network, from which the company earns its revenue, is rapidly declining in size as dealers leave to protest TrueCar's practices. The case also describes Painter's career and his personality as context for the situation. Painter and his team must persuade dealers to rejoin its network in order to survive, which will require the company to rethink its identity.
Swot Analysis of "TrueCar: Transforming The Car Buying Experience" written by Robert Siegel, Yin Li includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Painter Truecar facing as an external strategic factors. Some of the topics covered in TrueCar: Transforming The Car Buying Experience case study are - Strategic Management Strategies, Entrepreneurship, Marketing, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the TrueCar: Transforming The Car Buying Experience casestudy better are - – increasing transportation and logistics costs, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies,
increasing household debt because of falling income levels, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of TrueCar: Transforming The Car Buying Experience
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TrueCar: Transforming The Car Buying Experience case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Painter Truecar, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Painter Truecar 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 TrueCar: Transforming The Car Buying Experience can be done for the following purposes –
1. Strategic planning using facts provided in TrueCar: Transforming The Car Buying Experience case study
2. Improving business portfolio management of Painter Truecar
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Painter Truecar
Strengths TrueCar: Transforming The Car Buying Experience | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Painter Truecar in TrueCar: Transforming The Car Buying Experience Harvard Business Review case study are -
Diverse revenue streams
– Painter Truecar is present in almost all the verticals within the industry. This has provided firm in TrueCar: Transforming The Car Buying Experience 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.
Innovation driven organization
– Painter Truecar is one of the most innovative firm in sector. Manager in TrueCar: Transforming The Car Buying Experience Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Painter Truecar 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.
Analytics focus
– Painter Truecar 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 Siegel, Yin Li 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.
Sustainable margins compare to other players in Sales & Marketing industry
– TrueCar: Transforming The Car Buying Experience firm has clearly differentiated products in the market place. This has enabled Painter Truecar to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Painter Truecar to invest into research and development (R&D) and innovation.
Strong track record of project management
– Painter Truecar is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the TrueCar: Transforming The Car Buying Experience 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.
Highly skilled collaborators
– Painter Truecar 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 TrueCar: Transforming The Car Buying Experience HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Painter Truecar has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Painter Truecar to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Painter Truecar is one of the leading recruiters in the industry. Managers in the TrueCar: Transforming The Car Buying Experience are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Painter Truecar
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Painter Truecar does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Painter Truecar 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 Painter Truecar is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TrueCar: Transforming The Car Buying Experience Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses TrueCar: Transforming The Car Buying Experience | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TrueCar: Transforming The Car Buying Experience are -
Products dominated business model
– Even though Painter Truecar 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 - TrueCar: Transforming The Car Buying Experience should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study TrueCar: Transforming The Car Buying Experience, it seems that the employees of Painter Truecar 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 decision making process
– As mentioned earlier in the report, Painter Truecar 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. Painter Truecar 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.
Increasing silos among functional specialists
– The organizational structure of Painter Truecar is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Painter Truecar needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Painter Truecar to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Painter Truecar has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert Siegel, Yin Li suggests that, Painter Truecar 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.
Need for greater diversity
– Painter Truecar 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.
Aligning sales with marketing
– It come across in the case study TrueCar: Transforming The Car Buying Experience 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 TrueCar: Transforming The Car Buying Experience can leverage the sales team experience to cultivate customer relationships as Painter Truecar is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Painter Truecar 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.
Interest costs
– Compare to the competition, Painter Truecar 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Painter Truecar supply chain. Even after few cautionary changes mentioned in the HBR case study - TrueCar: Transforming The Car Buying Experience, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Painter Truecar vulnerable to further global disruptions in South East Asia.
Opportunities TrueCar: Transforming The Car Buying Experience | 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 TrueCar: Transforming The Car Buying Experience are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Painter Truecar 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 Painter Truecar to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Painter Truecar in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Painter Truecar 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, TrueCar: Transforming The Car Buying Experience, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Painter Truecar is facing challenges because of the dominance of functional experts in the organization. TrueCar: Transforming The Car Buying Experience 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.
Creating value in data economy
– The success of analytics program of Painter Truecar has opened avenues for new revenue streams for the organization in the industry. This can help Painter Truecar to build a more holistic ecosystem as suggested in the TrueCar: Transforming The Car Buying Experience case study. Painter Truecar can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Painter Truecar can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TrueCar: Transforming The Car Buying Experience 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Painter Truecar can use these opportunities to build new business models that can help the communities that Painter Truecar operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Painter Truecar can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Painter Truecar to increase its market reach. Painter Truecar 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 Painter Truecar in the consumer business. Now Painter Truecar can target international markets with far fewer capital restrictions requirements than the existing system.
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 Painter Truecar 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Painter Truecar can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Painter Truecar 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 TrueCar: Transforming The Car Buying Experience - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Painter Truecar to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats TrueCar: Transforming The Car Buying Experience External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TrueCar: Transforming The Car Buying Experience are -
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 Painter Truecar in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Painter Truecar 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 TrueCar: Transforming The Car Buying Experience .
Technology acceleration in Forth Industrial Revolution
– Painter Truecar has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Painter Truecar needs to keep up with the evolution of technology in the Sales & Marketing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TrueCar: Transforming The Car Buying Experience, Painter Truecar may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Regulatory challenges
– Painter Truecar 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 Sales & Marketing industry regulations.
Stagnating economy with rate increase
– Painter Truecar 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.
Shortening product life cycle
– it is one of the major threat that Painter Truecar is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Painter Truecar in the Sales & Marketing industry. The Sales & Marketing 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.
High dependence on third party suppliers
– Painter Truecar 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.
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 Painter Truecar.
Increasing wage structure of Painter Truecar
– 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 Painter Truecar.
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 Painter Truecar business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of TrueCar: Transforming The Car Buying Experience 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 TrueCar: Transforming The Car Buying Experience 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 TrueCar: Transforming The Car Buying Experience 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 TrueCar: Transforming The Car Buying Experience 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 TrueCar: Transforming The Car Buying Experience 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 Painter Truecar needs to make to build a sustainable competitive advantage.