Auchan in Syldavia: Formulating a strategy for the new subsidiary SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Auchan in Syldavia: Formulating a strategy for the new subsidiary
Michel Portal, a French executive with Auchan, has been appointed to lead a newly acquired subsidiary in the imaginary country of Syldavia. This case is based on a real situation that has been disguised for confidentiality reasons. The setting, Syldavia, is depicted as a transition economy and therefore fits in with the eastern and central European countries, although the case that inspired this situation is not situated in this part of the world but in Southern Europe. Auchan Syldavia is typical of a "taking charge" case study, where participants are expected to help Michel Portal, the new CEO, develop a strategy for his new assignment in a company that he is expected by upper management to turn around in a relatively short time span.
Swot Analysis of "Auchan in Syldavia: Formulating a strategy for the new subsidiary" written by Francis Bidault, Genevieve Feraud includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Syldavia Auchan facing as an external strategic factors. Some of the topics covered in Auchan in Syldavia: Formulating a strategy for the new subsidiary case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Auchan in Syldavia: Formulating a strategy for the new subsidiary casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic ,
there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Auchan in Syldavia: Formulating a strategy for the new subsidiary
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Auchan in Syldavia: Formulating a strategy for the new subsidiary case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Syldavia Auchan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Syldavia Auchan 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary can be done for the following purposes –
1. Strategic planning using facts provided in Auchan in Syldavia: Formulating a strategy for the new subsidiary case study
2. Improving business portfolio management of Syldavia Auchan
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 Syldavia Auchan
Strengths Auchan in Syldavia: Formulating a strategy for the new subsidiary | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Syldavia Auchan in Auchan in Syldavia: Formulating a strategy for the new subsidiary Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Syldavia Auchan in the sector have low bargaining power. Auchan in Syldavia: Formulating a strategy for the new subsidiary has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Syldavia Auchan to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Syldavia Auchan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Syldavia Auchan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Syldavia Auchan is present in almost all the verticals within the industry. This has provided firm in Auchan in Syldavia: Formulating a strategy for the new subsidiary case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Strategy & Execution field
– Syldavia Auchan 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 Syldavia Auchan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Syldavia Auchan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Syldavia Auchan 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.
Training and development
– Syldavia Auchan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Auchan in Syldavia: Formulating a strategy for the new subsidiary 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.
Strong track record of project management
– Syldavia Auchan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Syldavia Auchan is one of the most innovative firm in sector. Manager in Auchan in Syldavia: Formulating a strategy for the new subsidiary Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Auchan in Syldavia: Formulating a strategy for the new subsidiary firm has clearly differentiated products in the market place. This has enabled Syldavia Auchan to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Syldavia Auchan to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Syldavia Auchan is one of the leading recruiters in the industry. Managers in the Auchan in Syldavia: Formulating a strategy for the new subsidiary are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Syldavia Auchan in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Syldavia Auchan 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 Francis Bidault, Genevieve Feraud 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.
Weaknesses Auchan in Syldavia: Formulating a strategy for the new subsidiary | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Auchan in Syldavia: Formulating a strategy for the new subsidiary are -
Capital Spending Reduction
– Even during the low interest decade, Syldavia Auchan 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.
High cash cycle compare to competitors
Syldavia Auchan 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 Syldavia Auchan, firm in the HBR case study Auchan in Syldavia: Formulating a strategy for the new subsidiary needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Francis Bidault, Genevieve Feraud suggests that, Syldavia Auchan 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, Syldavia Auchan 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.
No frontier risks strategy
– After analyzing the HBR case study Auchan in Syldavia: Formulating a strategy for the new subsidiary, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Syldavia Auchan needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Auchan in Syldavia: Formulating a strategy for the new subsidiary, is just above the industry average. Syldavia Auchan 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.
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 Syldavia Auchan supply chain. Even after few cautionary changes mentioned in the HBR case study - Auchan in Syldavia: Formulating a strategy for the new subsidiary, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Syldavia Auchan vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Auchan in Syldavia: Formulating a strategy for the new subsidiary, in the dynamic environment Syldavia Auchan has struggled to respond to the nimble upstart competition. Syldavia Auchan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Syldavia Auchan 's lucrative customers.
Opportunities Auchan in Syldavia: Formulating a strategy for the new subsidiary | 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary are -
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. Syldavia Auchan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Syldavia Auchan is facing challenges because of the dominance of functional experts in the organization. Auchan in Syldavia: Formulating a strategy for the new subsidiary 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.
Leveraging digital technologies
– Syldavia Auchan 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.
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 Syldavia Auchan in the consumer business. Now Syldavia Auchan can target international markets with far fewer capital restrictions requirements than the existing system.
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. Syldavia Auchan can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Syldavia Auchan 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Syldavia Auchan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Syldavia Auchan 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Syldavia Auchan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Syldavia Auchan 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.
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 Syldavia Auchan 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Syldavia Auchan 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, Auchan in Syldavia: Formulating a strategy for the new subsidiary, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Syldavia Auchan 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Syldavia Auchan 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.
Threats Auchan in Syldavia: Formulating a strategy for the new subsidiary External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary, Syldavia Auchan 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Syldavia Auchan 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary .
High dependence on third party suppliers
– Syldavia Auchan 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.
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. Syldavia Auchan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Syldavia Auchan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Syldavia Auchan 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.
Regulatory challenges
– Syldavia Auchan 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.
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. Syldavia Auchan needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Syldavia Auchan 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.
Technology acceleration in Forth Industrial Revolution
– Syldavia Auchan has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Syldavia Auchan 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 Syldavia Auchan
– 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 Syldavia Auchan.
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 Syldavia Auchan.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Syldavia Auchan 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.
Weighted SWOT Analysis of Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Syldavia Auchan needs to make to build a sustainable competitive advantage.