MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation
Established in 1945, MGT Group (MGT, or the Group) was headquartered in France. Its LSD factory was a well-known global engineering provider specializing in the design and manufacture of high-precision valves. At the end of 2007, MGT decided to transfer the LSD factory in France to its Fuzhou factory in China. Two people were put in charge of this project: Kevin Lurton, vice-chief operations officer of MGT Control Systems Division, and Jian Li, the general manager of MGT Fuzhou Company. Lurton and Li faced a series of challenges, ranging from the need for strategic planning to the need for an implementation policy for supply chain reconstruction during this cross-border factory relocation. Amid the tide of globalization, enterprises are already able to extend their footprint to every corner of the world. For many multinational enterprises, transferring a product line, or even a whole factory, to another country has become a key step toward globalization.
Swot Analysis of "MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation" written by Xu Zhiduan, Shi Yun, Xu Yong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mgt Factory facing as an external strategic factors. Some of the topics covered in MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation casestudy better are - – increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, talent flight as more people leaving formal jobs,
technology disruption, increasing energy prices, etc
Introduction to SWOT Analysis of MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mgt Factory, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mgt Factory 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation can be done for the following purposes –
1. Strategic planning using facts provided in MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation case study
2. Improving business portfolio management of Mgt Factory
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mgt Factory
Strengths MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mgt Factory in MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation Harvard Business Review case study are -
High switching costs
– The high switching costs that Mgt Factory 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.
Cross disciplinary teams
– Horizontal connected teams at the Mgt Factory 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.
Ability to recruit top talent
– Mgt Factory is one of the leading recruiters in the industry. Managers in the MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation firm has clearly differentiated products in the market place. This has enabled Mgt Factory to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Mgt Factory to invest into research and development (R&D) and innovation.
Organizational Resilience of Mgt Factory
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mgt Factory does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Mgt Factory in the sector have low bargaining power. MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mgt Factory to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Mgt Factory is present in almost all the verticals within the industry. This has provided firm in MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation 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
– Mgt Factory is one of the most innovative firm in sector. Manager in MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Mgt Factory has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mgt Factory 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.
Operational resilience
– The operational resilience strategy in the MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation 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.
Strong track record of project management
– Mgt Factory is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Mgt Factory 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation are -
Low market penetration in new markets
– Outside its home market of Mgt Factory, firm in the HBR case study MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Xu Zhiduan, Shi Yun, Xu Yong suggests that, Mgt Factory 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.
Interest costs
– Compare to the competition, Mgt Factory 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 Mgt Factory supply chain. Even after few cautionary changes mentioned in the HBR case study - MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mgt Factory vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Mgt Factory 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 - MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Mgt Factory 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Mgt Factory 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation, is just above the industry average. Mgt Factory needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation HBR case study mentions - Mgt Factory takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation, in the dynamic environment Mgt Factory has struggled to respond to the nimble upstart competition. Mgt Factory has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Mgt Factory 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.
Opportunities MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation | 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mgt Factory 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. Mgt Factory 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.
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 Mgt Factory in the consumer business. Now Mgt Factory can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Mgt Factory can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mgt Factory 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, MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mgt Factory 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 Mgt Factory to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mgt Factory is facing challenges because of the dominance of functional experts in the organization. MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mgt Factory in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Manufacturing automation
– Mgt Factory can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Buying journey improvements
– Mgt Factory can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation 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.
Using analytics as competitive advantage
– Mgt Factory 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mgt Factory to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mgt Factory can use these opportunities to build new business models that can help the communities that Mgt Factory operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Mgt Factory can develop new processes and procedures in Strategy & Execution 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mgt Factory can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation are -
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 Mgt Factory.
Increasing wage structure of Mgt Factory
– 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 Mgt Factory.
Regulatory challenges
– Mgt Factory 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 Strategy & Execution industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mgt Factory with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation, Mgt Factory may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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 Mgt Factory business can come under increasing regulations regarding data privacy, data security, 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. Mgt Factory needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mgt Factory 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation .
Stagnating economy with rate increase
– Mgt Factory 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.
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 acceleration in Forth Industrial Revolution
– Mgt Factory has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Mgt Factory needs to keep up with the evolution of technology in the Strategy & Execution 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.
Shortening product life cycle
– it is one of the major threat that Mgt Factory is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Mgt Factory in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation 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 Mgt Factory needs to make to build a sustainable competitive advantage.
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