GAZ Group Russia: The Gazelle Light Commercial Truck SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of GAZ Group Russia: The Gazelle Light Commercial Truck
In January 2013, the CEO of the Russian automotive company Gorky Automobile Plant (GAZ) was pleased with the results of the recently implemented changes to the company's product-market strategy and the related organizational processes. He believed that this series of radical changes could help GAZ further cement its domestic market leadership position and at the same time allow it to complete a dramatic turnaround that had resulted in the company's most profitable year ever. He was now planning the launch of the third generation all-new Gazelle Next light transport truck, which he believed would take the company to a new level of competitiveness and revenue growth in Russia, and even more importantly, in other emerging markets.
Authors :: Andreas Schotter, Dmitry Alenushkin, Mary B. Teagarden
Swot Analysis of "GAZ Group Russia: The Gazelle Light Commercial Truck" written by Andreas Schotter, Dmitry Alenushkin, Mary B. Teagarden includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gaz Gazelle facing as an external strategic factors. Some of the topics covered in GAZ Group Russia: The Gazelle Light Commercial Truck case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the GAZ Group Russia: The Gazelle Light Commercial Truck casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, increasing commodity prices, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of GAZ Group Russia: The Gazelle Light Commercial Truck
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GAZ Group Russia: The Gazelle Light Commercial Truck case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gaz Gazelle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gaz Gazelle 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 GAZ Group Russia: The Gazelle Light Commercial Truck can be done for the following purposes –
1. Strategic planning using facts provided in GAZ Group Russia: The Gazelle Light Commercial Truck case study
2. Improving business portfolio management of Gaz Gazelle
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 Gaz Gazelle
Strengths GAZ Group Russia: The Gazelle Light Commercial Truck | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gaz Gazelle in GAZ Group Russia: The Gazelle Light Commercial Truck Harvard Business Review case study are -
High switching costs
– The high switching costs that Gaz Gazelle 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.
Organizational Resilience of Gaz Gazelle
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gaz Gazelle does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Gaz Gazelle 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 Gaz Gazelle is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in GAZ Group Russia: The Gazelle Light Commercial Truck Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Gaz Gazelle digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gaz Gazelle 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.
Training and development
– Gaz Gazelle has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in GAZ Group Russia: The Gazelle Light Commercial Truck 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.
Ability to recruit top talent
– Gaz Gazelle is one of the leading recruiters in the industry. Managers in the GAZ Group Russia: The Gazelle Light Commercial Truck 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
– GAZ Group Russia: The Gazelle Light Commercial Truck firm has clearly differentiated products in the market place. This has enabled Gaz Gazelle to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Gaz Gazelle to invest into research and development (R&D) and innovation.
Analytics focus
– Gaz Gazelle 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 Andreas Schotter, Dmitry Alenushkin, Mary B. Teagarden 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.
Highly skilled collaborators
– Gaz Gazelle 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 GAZ Group Russia: The Gazelle Light Commercial Truck 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 Gaz Gazelle in the sector have low bargaining power. GAZ Group Russia: The Gazelle Light Commercial Truck has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gaz Gazelle to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Gaz Gazelle 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.
Superior customer experience
– The customer experience strategy of Gaz Gazelle in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses GAZ Group Russia: The Gazelle Light Commercial Truck | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GAZ Group Russia: The Gazelle Light Commercial Truck are -
Capital Spending Reduction
– Even during the low interest decade, Gaz Gazelle 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.
Increasing silos among functional specialists
– The organizational structure of Gaz Gazelle is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Gaz Gazelle needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gaz Gazelle to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study GAZ Group Russia: The Gazelle Light Commercial Truck 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 Gaz Gazelle 's lucrative customers.
Slow to strategic competitive environment developments
– As GAZ Group Russia: The Gazelle Light Commercial Truck HBR case study mentions - Gaz Gazelle 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.
Need for greater diversity
– Gaz Gazelle 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.
Skills based hiring
– The stress on hiring functional specialists at Gaz Gazelle 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study GAZ Group Russia: The Gazelle Light Commercial Truck, it seems that the employees of Gaz Gazelle 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.
Low market penetration in new markets
– Outside its home market of Gaz Gazelle, firm in the HBR case study GAZ Group Russia: The Gazelle Light Commercial Truck needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Gaz Gazelle 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. Gaz Gazelle 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Andreas Schotter, Dmitry Alenushkin, Mary B. Teagarden suggests that, Gaz Gazelle 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, Gaz Gazelle 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.
Opportunities GAZ Group Russia: The Gazelle Light Commercial Truck | 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 GAZ Group Russia: The Gazelle Light Commercial Truck are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gaz Gazelle 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 Gaz Gazelle to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gaz Gazelle is facing challenges because of the dominance of functional experts in the organization. GAZ Group Russia: The Gazelle Light Commercial Truck 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.
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 Gaz Gazelle in the consumer business. Now Gaz Gazelle can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Gaz Gazelle 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.
Building a culture of innovation
– managers at Gaz Gazelle 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gaz Gazelle 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gaz Gazelle can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Gaz Gazelle can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Gaz Gazelle 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.
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 Gaz Gazelle 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.
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. Gaz Gazelle 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. Gaz Gazelle 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. Gaz Gazelle 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.
Manufacturing automation
– Gaz Gazelle 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.
Threats GAZ Group Russia: The Gazelle Light Commercial Truck External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GAZ Group Russia: The Gazelle Light Commercial Truck are -
Environmental challenges
– Gaz Gazelle 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. Gaz Gazelle can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Gaz Gazelle business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Gaz Gazelle is facing in Strategy & Execution 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. Gaz Gazelle needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gaz Gazelle 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.
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.
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. Gaz Gazelle 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.
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 Gaz Gazelle.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study GAZ Group Russia: The Gazelle Light Commercial Truck, Gaz Gazelle 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 .
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 Gaz Gazelle 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.
Increasing wage structure of Gaz Gazelle
– 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 Gaz Gazelle.
Consumer confidence and its impact on Gaz Gazelle 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.
Weighted SWOT Analysis of GAZ Group Russia: The Gazelle Light Commercial Truck 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 GAZ Group Russia: The Gazelle Light Commercial Truck 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 GAZ Group Russia: The Gazelle Light Commercial Truck 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 GAZ Group Russia: The Gazelle Light Commercial Truck 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 GAZ Group Russia: The Gazelle Light Commercial Truck 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 Gaz Gazelle needs to make to build a sustainable competitive advantage.