Supply Chain Management at International Automotive SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Supply Chain Management at International Automotive
Paul Salinas had just finished moving into his new office in Reynosa, Mexico. He closed the door and sat down, taking a moment to remember how his career had started with International Automotive Company. As he was finishing his engineering studies, Salinas had received a job opportunity as a trainee in the summer of 1995. That was in the company's QuerA?taro plant, in his hometown. This initial position as an administrative assistant was not necessarily exciting but he held on, knowing there was great potential for him to build his career within the company. During this time, Salinas was trained internally (six months of initial training followed by several specific training sessions per year) and sent to the company's headquarters in Germany before spending some time in the plant in Detroit as well. In Germany, he received a six months long training, which was followed by annual training sessions that lasted several weeks each time. Training in Detroit took places about three times a year, and lasted a few weeks at a time as well. He was familiarized with the technical and business aspects of running a manufacturing plant as he moved from promotion to promotion, and had held the position of operations manager for five years in QuerA?taro before moving to Reynosa. Apart from his remarkable career track, Salinas had the advantage of speaking Spanish, English and German. All of these qualities made him the perfect candidate to rebuild the entire supply chain in the plant that the company had just acquired from Motor Company II in Reynosa, Mexico in 2009.
Authors :: Katrin Haarer, Nahide Hannane, Leonardo Zapata-Flores, Joo Y. Jung
Swot Analysis of "Supply Chain Management at International Automotive" written by Katrin Haarer, Nahide Hannane, Leonardo Zapata-Flores, Joo Y. Jung includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Salinas Reynosa facing as an external strategic factors. Some of the topics covered in Supply Chain Management at International Automotive case study are - Strategic Management Strategies, Strategy, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Supply Chain Management at International Automotive casestudy better are - – talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation,
supply chains are disrupted by pandemic , increasing energy prices, etc
Introduction to SWOT Analysis of Supply Chain Management at International Automotive
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Supply Chain Management at International Automotive case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Salinas Reynosa, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Salinas Reynosa 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 Supply Chain Management at International Automotive can be done for the following purposes –
1. Strategic planning using facts provided in Supply Chain Management at International Automotive case study
2. Improving business portfolio management of Salinas Reynosa
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 Salinas Reynosa
Strengths Supply Chain Management at International Automotive | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Salinas Reynosa in Supply Chain Management at International Automotive Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Salinas Reynosa in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Salinas Reynosa digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Salinas Reynosa 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.
High brand equity
– Salinas Reynosa has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Salinas Reynosa to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Salinas Reynosa is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– Supply Chain Management at International Automotive firm has clearly differentiated products in the market place. This has enabled Salinas Reynosa to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Salinas Reynosa to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Salinas Reynosa has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Salinas Reynosa 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.
Effective Research and Development (R&D)
– Salinas Reynosa 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 Supply Chain Management at International Automotive - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Salinas Reynosa 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 Supply Chain Management at International Automotive HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Salinas Reynosa 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 Salinas Reynosa is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Supply Chain Management at International Automotive Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Salinas Reynosa 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.
Training and development
– Salinas Reynosa has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Supply Chain Management at International Automotive 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
– Salinas Reynosa is one of the most innovative firm in sector. Manager in Supply Chain Management at International Automotive Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Supply Chain Management at International Automotive | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Supply Chain Management at International Automotive are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Supply Chain Management at International Automotive 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 Salinas Reynosa has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Salinas Reynosa is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Supply Chain Management at International Automotive can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Supply Chain Management at International Automotive, it seems that the employees of Salinas Reynosa 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 Salinas Reynosa, firm in the HBR case study Supply Chain Management at International Automotive needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Salinas Reynosa 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.
Slow to strategic competitive environment developments
– As Supply Chain Management at International Automotive HBR case study mentions - Salinas Reynosa 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.
Products dominated business model
– Even though Salinas Reynosa 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 - Supply Chain Management at International Automotive should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Salinas Reynosa products
– To increase the profitability and margins on the products, Salinas Reynosa needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Salinas Reynosa 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. Salinas Reynosa 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 cash cycle compare to competitors
Salinas Reynosa 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Supply Chain Management at International Automotive, is just above the industry average. Salinas Reynosa 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.
Opportunities Supply Chain Management at International Automotive | 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 Supply Chain Management at International Automotive are -
Leveraging digital technologies
– Salinas Reynosa can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, 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. Salinas Reynosa can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Salinas Reynosa 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.
Creating value in data economy
– The success of analytics program of Salinas Reynosa has opened avenues for new revenue streams for the organization in the industry. This can help Salinas Reynosa to build a more holistic ecosystem as suggested in the Supply Chain Management at International Automotive case study. Salinas Reynosa can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Salinas Reynosa to increase its market reach. Salinas Reynosa 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.
Loyalty marketing
– Salinas Reynosa 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Salinas Reynosa 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Salinas Reynosa 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 Salinas Reynosa to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Salinas Reynosa 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, Supply Chain Management at International Automotive, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Salinas Reynosa 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.
Developing new processes and practices
– Salinas Reynosa 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.
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 Salinas Reynosa 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.
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 Salinas Reynosa in the consumer business. Now Salinas Reynosa can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Supply Chain Management at International Automotive External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Supply Chain Management at International Automotive are -
Regulatory challenges
– Salinas Reynosa 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Supply Chain Management at International Automotive, Salinas Reynosa 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 .
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.
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 Salinas Reynosa business can come under increasing regulations regarding data privacy, data security, etc.
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. Salinas Reynosa can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Salinas Reynosa has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Salinas Reynosa 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.
Increasing wage structure of Salinas Reynosa
– 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 Salinas Reynosa.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Salinas Reynosa 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.
Environmental challenges
– Salinas Reynosa 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. Salinas Reynosa can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Salinas Reynosa 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.
Stagnating economy with rate increase
– Salinas Reynosa 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 Salinas Reynosa is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Salinas Reynosa with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Supply Chain Management at International Automotive 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 Supply Chain Management at International Automotive 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 Supply Chain Management at International Automotive 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 Supply Chain Management at International Automotive 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 Supply Chain Management at International Automotive 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 Salinas Reynosa needs to make to build a sustainable competitive advantage.