Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China
Shanghai Inteva Automotive Door System Co. Ltd (formerly Shanghai Delphi) was a leading player in China's automotive component industry with a 30%market share. Nonetheless, between 2007 and 2009, it failed to meet its profit targets for three consecutive years. A number of factors contributed to this failure, some internal and some associated with the challenges of working in an emerging economy. If Shanghai Inteva is to stay competitive, it has to start making its targets.
Swot Analysis of "Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China" written by Neale O'Connor, Grace Loo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shanghai Inteva facing as an external strategic factors. Some of the topics covered in Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China case study are - Strategic Management Strategies, Employee retention, Manufacturing, Performance measurement, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing energy prices, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Inteva, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Inteva 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China can be done for the following purposes –
1. Strategic planning using facts provided in Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China case study
2. Improving business portfolio management of Shanghai Inteva
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 Shanghai Inteva
Strengths Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Inteva in Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China Harvard Business Review case study are -
Strong track record of project management
– Shanghai Inteva is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Shanghai Inteva 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.
Highly skilled collaborators
– Shanghai Inteva 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Shanghai Inteva in the sector have low bargaining power. Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai Inteva to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Shanghai Inteva has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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.
Innovation driven organization
– Shanghai Inteva is one of the most innovative firm in sector. Manager in Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Shanghai Inteva 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.
Organizational Resilience of Shanghai Inteva
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shanghai Inteva does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China firm has clearly differentiated products in the market place. This has enabled Shanghai Inteva to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Shanghai Inteva to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Shanghai Inteva 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Shanghai Inteva 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 Neale O'Connor, Grace Loo 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.
Operational resilience
– The operational resilience strategy in the Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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.
Weaknesses Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China are -
Increasing silos among functional specialists
– The organizational structure of Shanghai Inteva is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Shanghai Inteva needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai Inteva to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China HBR case study mentions - Shanghai Inteva 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Neale O'Connor, Grace Loo suggests that, Shanghai Inteva 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.
Capital Spending Reduction
– Even during the low interest decade, Shanghai Inteva 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai Inteva is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Shanghai Inteva 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.
Aligning sales with marketing
– It come across in the case study Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China can leverage the sales team experience to cultivate customer relationships as Shanghai Inteva is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Shanghai Inteva 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.
Lack of clear differentiation of Shanghai Inteva products
– To increase the profitability and margins on the products, Shanghai Inteva needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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 Shanghai Inteva has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Shanghai Inteva, firm in the HBR case study Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China | 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China are -
Buying journey improvements
– Shanghai Inteva can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai Inteva 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 Shanghai Inteva to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Shanghai Inteva 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.
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. Shanghai Inteva can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shanghai Inteva 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.
Building a culture of innovation
– managers at Shanghai Inteva 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 Strategy & Execution segment.
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. Shanghai Inteva 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. Shanghai Inteva 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.
Using analytics as competitive advantage
– Shanghai Inteva 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Inteva 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 Shanghai Inteva has opened avenues for new revenue streams for the organization in the industry. This can help Shanghai Inteva to build a more holistic ecosystem as suggested in the Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China case study. Shanghai Inteva can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai Inteva can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Shanghai Inteva 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.
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. Shanghai Inteva can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Shanghai Inteva 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China are -
High dependence on third party suppliers
– Shanghai Inteva 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.
Consumer confidence and its impact on Shanghai Inteva demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanghai Inteva 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China .
Regulatory challenges
– Shanghai Inteva 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.
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 Shanghai Inteva 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. Shanghai Inteva needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Shanghai Inteva.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Shanghai Inteva with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Shanghai Inteva needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Shanghai Inteva can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Shanghai Inteva in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Shanghai Inteva 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.
Weighted SWOT Analysis of Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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 Shanghai Interior Automotive Door System: Running a Manufacturing Operation in China 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 Shanghai Inteva needs to make to build a sustainable competitive advantage.
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