BAIC and the Saab Automobile Acquisition Opportunity SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of BAIC and the Saab Automobile Acquisition Opportunity
The chief financial officer at Beijing Automobile Group Co. Ltd., a large Chinese state-owned automobile manufacturer, is weighing up whether the company should purchase an equity stake and/or access to the intellectual property rights and production equipment of Saab Automobile, the troubled Swedish premium automaker owned by General Motors. Previous experience of Chinese technology acquisitions in the auto sector has given him pause for thought. He has to weigh up the likely return on investment, the ability of the company's workforce to absorb and develop new technology, and the role of competitors in China's rapidly growing auto market. He has three options: purchase access to Saab's intellectual property rights alone, purchase an equity stake as well as access to those rights or do neither. If he goes ahead with either of the first two options, and if the gamble pays off, he will enhance his own reputation and that of his company. However, if the gamble fails, not only reputation but potentially a lot of money will be lost and much effort wasted in trying to absorb a foreign product into current operations.
Swot Analysis of "BAIC and the Saab Automobile Acquisition Opportunity" written by Simon Parker, Yang Wang, Ma Chunguang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Automobile Saab facing as an external strategic factors. Some of the topics covered in BAIC and the Saab Automobile Acquisition Opportunity case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the BAIC and the Saab Automobile Acquisition Opportunity casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, supply chains are disrupted by pandemic , increasing commodity prices, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
increasing energy prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of BAIC and the Saab Automobile Acquisition Opportunity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BAIC and the Saab Automobile Acquisition Opportunity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Automobile Saab, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Automobile Saab 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 BAIC and the Saab Automobile Acquisition Opportunity can be done for the following purposes –
1. Strategic planning using facts provided in BAIC and the Saab Automobile Acquisition Opportunity case study
2. Improving business portfolio management of Automobile Saab
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 Automobile Saab
Strengths BAIC and the Saab Automobile Acquisition Opportunity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Automobile Saab in BAIC and the Saab Automobile Acquisition Opportunity Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Automobile Saab 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.
Ability to lead change in Strategy & Execution field
– Automobile Saab 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 Automobile Saab in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Automobile Saab digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Automobile Saab 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.
Innovation driven organization
– Automobile Saab is one of the most innovative firm in sector. Manager in BAIC and the Saab Automobile Acquisition Opportunity Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Automobile Saab 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 BAIC and the Saab Automobile Acquisition Opportunity - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Automobile Saab 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
– Automobile Saab 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 BAIC and the Saab Automobile Acquisition Opportunity HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Automobile Saab in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Automobile Saab 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 Simon Parker, Yang Wang, Ma Chunguang 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.
Organizational Resilience of Automobile Saab
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Automobile Saab does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– BAIC and the Saab Automobile Acquisition Opportunity firm has clearly differentiated products in the market place. This has enabled Automobile Saab to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Automobile Saab to invest into research and development (R&D) and innovation.
High brand equity
– Automobile Saab has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Automobile Saab to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses BAIC and the Saab Automobile Acquisition Opportunity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BAIC and the Saab Automobile Acquisition Opportunity are -
High bargaining power of channel partners
– Because of the regulatory requirements, Simon Parker, Yang Wang, Ma Chunguang suggests that, Automobile Saab 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.
Skills based hiring
– The stress on hiring functional specialists at Automobile Saab 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.
Lack of clear differentiation of Automobile Saab products
– To increase the profitability and margins on the products, Automobile Saab needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Automobile Saab is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BAIC and the Saab Automobile Acquisition Opportunity can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the BAIC and the Saab Automobile Acquisition Opportunity 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 Automobile Saab has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Automobile Saab 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.
Slow to strategic competitive environment developments
– As BAIC and the Saab Automobile Acquisition Opportunity HBR case study mentions - Automobile Saab 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 Automobile Saab 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 - BAIC and the Saab Automobile Acquisition Opportunity should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Automobile Saab 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 decision making process
– As mentioned earlier in the report, Automobile Saab 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. Automobile Saab 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.
Increasing silos among functional specialists
– The organizational structure of Automobile Saab is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Automobile Saab needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Automobile Saab to focus more on services rather than just following the product oriented approach.
Opportunities BAIC and the Saab Automobile Acquisition Opportunity | 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 BAIC and the Saab Automobile Acquisition Opportunity 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. Automobile Saab 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, Automobile Saab is facing challenges because of the dominance of functional experts in the organization. BAIC and the Saab Automobile Acquisition Opportunity 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.
Manufacturing automation
– Automobile Saab 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Automobile Saab 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, BAIC and the Saab Automobile Acquisition Opportunity, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Automobile Saab can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Automobile Saab in the consumer business. Now Automobile Saab can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Automobile Saab 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. Automobile Saab 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Automobile Saab 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 Automobile Saab 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
– Automobile Saab 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 BAIC and the Saab Automobile Acquisition Opportunity - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Automobile Saab to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Automobile Saab 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Automobile Saab can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Automobile Saab 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 Automobile Saab to hire the very best people irrespective of their geographical location.
Threats BAIC and the Saab Automobile Acquisition Opportunity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BAIC and the Saab Automobile Acquisition Opportunity are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Automobile Saab 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.
Consumer confidence and its impact on Automobile Saab 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.
Environmental challenges
– Automobile Saab 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. Automobile Saab can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Automobile Saab can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Automobile Saab 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 BAIC and the Saab Automobile Acquisition Opportunity .
High dependence on third party suppliers
– Automobile Saab 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study BAIC and the Saab Automobile Acquisition Opportunity, Automobile Saab 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 Automobile Saab business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Automobile Saab with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Shortening product life cycle
– it is one of the major threat that Automobile Saab is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Automobile Saab 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 disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of BAIC and the Saab Automobile Acquisition Opportunity 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 BAIC and the Saab Automobile Acquisition Opportunity 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 BAIC and the Saab Automobile Acquisition Opportunity 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 BAIC and the Saab Automobile Acquisition Opportunity 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 BAIC and the Saab Automobile Acquisition Opportunity 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 Automobile Saab needs to make to build a sustainable competitive advantage.
