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 inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, technology disruption, competitive advantages are harder to sustain because of technology dispersion,
increasing energy prices, supply chains are disrupted by pandemic , 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study TrueCar: Transforming The Car Buying Experience, in the dynamic environment Painter Truecar has struggled to respond to the nimble upstart competition. Painter Truecar has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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.
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.
Lack of clear differentiation of Painter Truecar products
– To increase the profitability and margins on the products, Painter Truecar needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
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.
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.
Learning at scale
– Online learning technologies has now opened space for Painter Truecar 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 Painter Truecar is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Painter Truecar needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 .
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.
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Painter Truecar with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
