Motor City: A Disruptive Business Model (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Motor City: A Disruptive Business Model (A)
This case is appropriate for teaching in entrepreneurship, strategy, marketing, and finance courses. Motor City is the business brainchild of an absentee owner. It is a new business model for selling used cars and requires a senior management familiar with the car industry. Some issues are: How should the management be compensated to align interests with the owner? Stock ownership, phantom stock ownership, profit sharing? The B case [UV2045] raises such issues as matching the pace of growth with available cash flow.
Swot Analysis of "Motor City: A Disruptive Business Model (A)" written by Edward D. Hess includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Motor Uv2045 facing as an external strategic factors. Some of the topics covered in Motor City: A Disruptive Business Model (A) case study are - Strategic Management Strategies, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Motor City: A Disruptive Business Model (A) casestudy better are - – cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing household debt because of falling income levels, technology disruption,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Motor City: A Disruptive Business Model (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Motor City: A Disruptive Business Model (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Motor Uv2045, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Motor Uv2045 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 Motor City: A Disruptive Business Model (A) can be done for the following purposes –
1. Strategic planning using facts provided in Motor City: A Disruptive Business Model (A) case study
2. Improving business portfolio management of Motor Uv2045
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Motor Uv2045
Strengths Motor City: A Disruptive Business Model (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Motor Uv2045 in Motor City: A Disruptive Business Model (A) Harvard Business Review case study are -
High switching costs
– The high switching costs that Motor Uv2045 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Motor Uv2045 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Motor Uv2045 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.
Operational resilience
– The operational resilience strategy in the Motor City: A Disruptive Business Model (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Finance & Accounting field
– Motor Uv2045 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 Motor Uv2045 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Motor Uv2045 is one of the most innovative firm in sector. Manager in Motor City: A Disruptive Business Model (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Motor Uv2045 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Motor Uv2045 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Motor City: A Disruptive Business Model (A) firm has clearly differentiated products in the market place. This has enabled Motor Uv2045 to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Motor Uv2045 to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Motor Uv2045 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 Motor City: A Disruptive Business Model (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Motor Uv2045 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 Motor City: A Disruptive Business Model (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Motor Uv2045 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 Motor Uv2045 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Motor City: A Disruptive Business Model (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Motor Uv2045 is present in almost all the verticals within the industry. This has provided firm in Motor City: A Disruptive Business Model (A) 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.
Low bargaining power of suppliers
– Suppliers of Motor Uv2045 in the sector have low bargaining power. Motor City: A Disruptive Business Model (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Motor Uv2045 to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Motor City: A Disruptive Business Model (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Motor City: A Disruptive Business Model (A) are -
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 Motor Uv2045 supply chain. Even after few cautionary changes mentioned in the HBR case study - Motor City: A Disruptive Business Model (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Motor Uv2045 vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Motor Uv2045 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. Motor Uv2045 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.
Capital Spending Reduction
– Even during the low interest decade, Motor Uv2045 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Motor City: A Disruptive Business Model (A), in the dynamic environment Motor Uv2045 has struggled to respond to the nimble upstart competition. Motor Uv2045 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Motor City: A Disruptive Business Model (A) 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 Motor City: A Disruptive Business Model (A) can leverage the sales team experience to cultivate customer relationships as Motor Uv2045 is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Motor City: A Disruptive Business Model (A), it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Motor City: A Disruptive Business Model (A) 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 Motor Uv2045 has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Motor City: A Disruptive Business Model (A), it seems that the employees of Motor Uv2045 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.
Increasing silos among functional specialists
– The organizational structure of Motor Uv2045 is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Motor Uv2045 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Motor Uv2045 to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Motor Uv2045 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.
Need for greater diversity
– Motor Uv2045 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.
Opportunities Motor City: A Disruptive Business Model (A) | 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 Motor City: A Disruptive Business Model (A) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Motor Uv2045 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, Motor City: A Disruptive Business Model (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Motor Uv2045 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Motor Uv2045 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 Motor Uv2045 to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Motor Uv2045 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.
Using analytics as competitive advantage
– Motor Uv2045 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 Motor City: A Disruptive Business Model (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Motor Uv2045 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Motor Uv2045 can develop new processes and procedures in Finance & Accounting 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.
Better consumer reach
– The expansion of the 5G network will help Motor Uv2045 to increase its market reach. Motor Uv2045 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.
Manufacturing automation
– Motor Uv2045 can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Motor Uv2045 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.
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. Motor Uv2045 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Motor Uv2045 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Motor City: A Disruptive Business Model (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Motor Uv2045 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Motor Uv2045 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. Motor Uv2045 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.
Threats Motor City: A Disruptive Business Model (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Motor City: A Disruptive Business Model (A) are -
Consumer confidence and its impact on Motor Uv2045 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.
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
– Motor Uv2045 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.
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 Motor Uv2045.
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. Motor Uv2045 needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Motor Uv2045 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 Motor City: A Disruptive Business Model (A) .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Motor Uv2045 in the Finance & Accounting industry. The Finance & Accounting 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.
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 Motor Uv2045 in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Motor Uv2045
– 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 Motor Uv2045.
Regulatory challenges
– Motor Uv2045 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 Finance & Accounting 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 Motor City: A Disruptive Business Model (A), Motor Uv2045 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Stagnating economy with rate increase
– Motor Uv2045 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.
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. Motor Uv2045 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.
Weighted SWOT Analysis of Motor City: A Disruptive Business Model (A) 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 Motor City: A Disruptive Business Model (A) 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 Motor City: A Disruptive Business Model (A) 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 Motor City: A Disruptive Business Model (A) 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 Motor City: A Disruptive Business Model (A) 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 Motor Uv2045 needs to make to build a sustainable competitive advantage.
