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 commodity prices, there is backlash against globalization, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation,
wage bills are increasing, increasing government debt because of Covid-19 spendings, 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 -
Ability to lead change in Strategy & Execution field
– Mgt Factory is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Mgt Factory in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Mgt Factory 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 MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Training and development
– Mgt Factory has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Mgt Factory 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 Xu Zhiduan, Shi Yun, Xu Yong 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
- Mgt Factory 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 Mgt Factory is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
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.
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.
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 -
Lack of clear differentiation of Mgt Factory products
– To increase the profitability and margins on the products, Mgt Factory needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Mgt Factory 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.
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.
High cash cycle compare to competitors
Mgt Factory 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.
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.
Slow decision making process
– As mentioned earlier in the report, Mgt Factory 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. Mgt Factory 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 Mgt Factory is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Mgt Factory needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mgt Factory to focus more on services rather than just following the product 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 -
Creating value in data economy
– The success of analytics program of Mgt Factory has opened avenues for new revenue streams for the organization in the industry. This can help Mgt Factory to build a more holistic ecosystem as suggested in the MGT Group: Reconstructing the Supply Chain After a Cross-Border Factory Relocation case study. Mgt Factory can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Mgt Factory can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Mgt Factory 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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Mgt Factory 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Mgt Factory to increase its market reach. Mgt Factory will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for 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.
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.
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 -
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 .
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.
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.
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 .
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.
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. Mgt Factory 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.
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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mgt Factory can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mgt Factory in the Strategy & Execution industry. The Strategy & Execution 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
– Mgt Factory 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.
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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