Groupe Park Avenue: Growth and Transitions SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Groupe Park Avenue: Growth and Transitions
Groupe Park Avenue (GPA) owns a large group of automotive dealers in Montreal, Canada. The business's origins go back to Norm D. HA?bert, who purchased an underperforming Chevrolet dealer on Park Avenue in downtown Montreal in 1959. His son Norman Jr. joined GPA in 1980, when it was still a single dealership. Now, thirty-five years later, GPA owns 20 car dealerships and must adapt to an ever-evolving landscape. Historically "mom and pop" shops, dealerships are increasingly acquired by regional dealer groups such as GPA and by public companies. Indeed, AutoCanada, a Canadian public company, has just purchased a BMW and a MINI dealer in the Montreal market, the first time a consolidator has stepped onto GPA's home turf. Meanwhile, GPA is also changing, with Norman Jr.'s son having recently joined the business. This case, which centres on the interaction between enterprise growth and family ownership, examines the strategic challenges and ownership transition issues facing GPA.
Authors :: Brian King, Johanne Brunet, Gary F. Gebhardt
Swot Analysis of "Groupe Park Avenue: Growth and Transitions" written by Brian King, Johanne Brunet, Gary F. Gebhardt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gpa Avenue facing as an external strategic factors. Some of the topics covered in Groupe Park Avenue: Growth and Transitions case study are - Strategic Management Strategies, Marketing, Succession planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Groupe Park Avenue: Growth and Transitions casestudy better are - – increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, increasing energy prices,
increasing household debt because of falling income levels, wage bills are increasing, etc
Introduction to SWOT Analysis of Groupe Park Avenue: Growth and Transitions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Groupe Park Avenue: Growth and Transitions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gpa Avenue, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gpa Avenue 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 Groupe Park Avenue: Growth and Transitions can be done for the following purposes –
1. Strategic planning using facts provided in Groupe Park Avenue: Growth and Transitions case study
2. Improving business portfolio management of Gpa Avenue
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 Gpa Avenue
Strengths Groupe Park Avenue: Growth and Transitions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gpa Avenue in Groupe Park Avenue: Growth and Transitions Harvard Business Review case study are -
Learning organization
- Gpa Avenue 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 Gpa Avenue is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Groupe Park Avenue: Growth and Transitions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Gpa Avenue is present in almost all the verticals within the industry. This has provided firm in Groupe Park Avenue: Growth and Transitions 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.
Strong track record of project management
– Gpa Avenue is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Gpa Avenue has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gpa Avenue to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Gpa Avenue in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Gpa Avenue has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Groupe Park Avenue: Growth and Transitions 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.
Ability to lead change in Strategy & Execution field
– Gpa Avenue 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 Gpa Avenue 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 Gpa Avenue digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gpa Avenue has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Gpa Avenue 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.
Highly skilled collaborators
– Gpa Avenue 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 Groupe Park Avenue: Growth and Transitions HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Gpa Avenue
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gpa Avenue does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Gpa Avenue 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.
Weaknesses Groupe Park Avenue: Growth and Transitions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Groupe Park Avenue: Growth and Transitions are -
Capital Spending Reduction
– Even during the low interest decade, Gpa Avenue 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.
Increasing silos among functional specialists
– The organizational structure of Gpa Avenue is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Gpa Avenue needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gpa Avenue to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Gpa Avenue 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.
No frontier risks strategy
– After analyzing the HBR case study Groupe Park Avenue: Growth and Transitions, 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Groupe Park Avenue: Growth and Transitions 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 Gpa Avenue has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Groupe Park Avenue: Growth and Transitions, it seems that the employees of Gpa Avenue 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Groupe Park Avenue: Growth and Transitions, is just above the industry average. Gpa Avenue 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.
Low market penetration in new markets
– Outside its home market of Gpa Avenue, firm in the HBR case study Groupe Park Avenue: Growth and Transitions needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Brian King, Johanne Brunet, Gary F. Gebhardt suggests that, Gpa Avenue 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.
Slow to strategic competitive environment developments
– As Groupe Park Avenue: Growth and Transitions HBR case study mentions - Gpa Avenue 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.
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 Gpa Avenue supply chain. Even after few cautionary changes mentioned in the HBR case study - Groupe Park Avenue: Growth and Transitions, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gpa Avenue vulnerable to further global disruptions in South East Asia.
Opportunities Groupe Park Avenue: Growth and Transitions | 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 Groupe Park Avenue: Growth and Transitions are -
Building a culture of innovation
– managers at Gpa Avenue 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gpa Avenue 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 Gpa Avenue to hire the very best people irrespective of their geographical location.
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 Gpa Avenue 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gpa Avenue can use these opportunities to build new business models that can help the communities that Gpa Avenue operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Gpa Avenue to increase its market reach. Gpa Avenue 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gpa Avenue is facing challenges because of the dominance of functional experts in the organization. Groupe Park Avenue: Growth and Transitions 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.
Developing new processes and practices
– Gpa Avenue 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 Gpa Avenue 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.
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 Gpa Avenue in the consumer business. Now Gpa Avenue can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Gpa Avenue has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gpa Avenue 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. Gpa Avenue can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Gpa Avenue has opened avenues for new revenue streams for the organization in the industry. This can help Gpa Avenue to build a more holistic ecosystem as suggested in the Groupe Park Avenue: Growth and Transitions case study. Gpa Avenue can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Groupe Park Avenue: Growth and Transitions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Groupe Park Avenue: Growth and Transitions are -
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 Gpa Avenue business can come under increasing regulations regarding data privacy, data security, etc.
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 Gpa Avenue in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gpa Avenue 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.
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. Gpa Avenue needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Gpa Avenue is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Gpa Avenue 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.
Stagnating economy with rate increase
– Gpa Avenue 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.
Regulatory challenges
– Gpa Avenue 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 dependence on third party suppliers
– Gpa Avenue 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.
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.
Technology acceleration in Forth Industrial Revolution
– Gpa Avenue has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Gpa Avenue 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.
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. Gpa Avenue can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Gpa Avenue 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. Gpa Avenue can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Groupe Park Avenue: Growth and Transitions 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 Groupe Park Avenue: Growth and Transitions 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 Groupe Park Avenue: Growth and Transitions 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 Groupe Park Avenue: Growth and Transitions 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 Groupe Park Avenue: Growth and Transitions 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 Gpa Avenue needs to make to build a sustainable competitive advantage.
