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 - – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing commodity prices, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy,
challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
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.
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.
Effective Research and Development (R&D)
– Painter Truecar 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 TrueCar: Transforming The Car Buying Experience - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Painter Truecar in the sector have low bargaining power. TrueCar: Transforming The Car Buying Experience has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Painter Truecar to manage not only supply disruptions but also source products at highly competitive prices.
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.
Successful track record of launching new products
– Painter Truecar has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Painter Truecar 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 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.
Cross disciplinary teams
– Horizontal connected teams at the Painter Truecar 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.
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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Painter Truecar digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Painter Truecar 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.
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 -
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Painter Truecar 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.
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.
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.
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 dependence on star products
– The top 2 products and services of the firm as mentioned in the TrueCar: Transforming The Car Buying Experience 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 Painter Truecar has relatively successful track record of launching new products.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study TrueCar: Transforming The Car Buying Experience, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study TrueCar: Transforming The Car Buying Experience 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 Painter Truecar 's lucrative customers.
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 -
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.
Building a culture of innovation
– managers at Painter Truecar 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 Sales & Marketing segment.
Loyalty marketing
– Painter Truecar 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.
Developing new processes and practices
– Painter Truecar can develop new processes and procedures in Sales & Marketing 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.
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. Painter Truecar can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Leveraging digital technologies
– Painter Truecar can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Painter Truecar 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. Painter Truecar 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, Painter Truecar 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, 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.
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.
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 -
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.
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. Painter Truecar 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.
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.
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.
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.
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.
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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Painter Truecar can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 .
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.
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.