Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA)
The director of warehousing and logistics at Volkswagen Group Canada (VGCA) had been tasked with analyzing the capacity of the Toronto parts distribution center to support an aggressive growth plan that involved a series of new product launches and product facelifts. Expecting that expansion of the facility would be necessary, the director needed to establish the additional warehouse capacity required, when it would be needed by and which expansion option made the most sense.
Swot Analysis of "Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA)" written by P. Fraser Johnson, Adam Bortolussi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vgca Warehousing facing as an external strategic factors. Some of the topics covered in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) case study are - Strategic Management Strategies, Marketing, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc
Introduction to SWOT Analysis of Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vgca Warehousing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vgca Warehousing 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) can be done for the following purposes –
1. Strategic planning using facts provided in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) case study
2. Improving business portfolio management of Vgca Warehousing
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 Vgca Warehousing
Strengths Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vgca Warehousing in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) Harvard Business Review case study are -
Successful track record of launching new products
– Vgca Warehousing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vgca Warehousing 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.
High switching costs
– The high switching costs that Vgca Warehousing 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.
Cross disciplinary teams
– Horizontal connected teams at the Vgca Warehousing 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Vgca Warehousing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vgca Warehousing 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) firm has clearly differentiated products in the market place. This has enabled Vgca Warehousing to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Vgca Warehousing to invest into research and development (R&D) and innovation.
Strong track record of project management
– Vgca Warehousing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Vgca Warehousing 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Vgca Warehousing 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Vgca Warehousing is one of the most innovative firm in sector. Manager in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Vgca Warehousing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vgca Warehousing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Vgca Warehousing 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 P. Fraser Johnson, Adam Bortolussi can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Vgca Warehousing 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 Vgca Warehousing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) are -
Lack of clear differentiation of Vgca Warehousing products
– To increase the profitability and margins on the products, Vgca Warehousing needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, P. Fraser Johnson, Adam Bortolussi suggests that, Vgca Warehousing 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Vgca Warehousing 's lucrative customers.
High cash cycle compare to competitors
Vgca Warehousing 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.
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 Vgca Warehousing supply chain. Even after few cautionary changes mentioned in the HBR case study - Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vgca Warehousing vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Vgca Warehousing 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 - Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Vgca Warehousing 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.
Aligning sales with marketing
– It come across in the case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) can leverage the sales team experience to cultivate customer relationships as Vgca Warehousing is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Vgca Warehousing 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.
Slow to strategic competitive environment developments
– As Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) HBR case study mentions - Vgca Warehousing 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA), it seems that the employees of Vgca Warehousing 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.
Opportunities Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) | 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vgca Warehousing can use these opportunities to build new business models that can help the communities that Vgca Warehousing operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vgca Warehousing 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, Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vgca Warehousing 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 Vgca Warehousing to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Vgca Warehousing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vgca Warehousing is facing challenges because of the dominance of functional experts in the organization. Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vgca Warehousing 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 Vgca Warehousing 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.
Creating value in data economy
– The success of analytics program of Vgca Warehousing has opened avenues for new revenue streams for the organization in the industry. This can help Vgca Warehousing to build a more holistic ecosystem as suggested in the Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) case study. Vgca Warehousing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Vgca Warehousing 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.
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. Vgca Warehousing 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 Vgca Warehousing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vgca Warehousing 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.
Learning at scale
– Online learning technologies has now opened space for Vgca Warehousing 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.
Threats Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) are -
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. Vgca Warehousing needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Vgca Warehousing
– 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 Vgca Warehousing.
Shortening product life cycle
– it is one of the major threat that Vgca Warehousing is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Vgca Warehousing has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Vgca Warehousing 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Vgca Warehousing 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.
Regulatory challenges
– Vgca Warehousing 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA), Vgca Warehousing 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 .
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 Vgca Warehousing business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Vgca Warehousing 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.
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. Vgca Warehousing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Vgca Warehousing.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vgca Warehousing 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Vgca Warehousing needs to make to build a sustainable competitive advantage.
