Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point
Many discussions of raising national competitiveness take the "global factory" model as their starting point. This model essentially assumes that the primary way for less developed economies to catch up is to carry out low value-added activities within the global supply chain. The inevitable result is a frantic race to the bottom, where being competitive means being the lowest cost provider. This article proposes a markedly different approach based on the orchestration of an economy's "Vantage Point." Rather than cutting costs (and living standards), countries should instead focus on enhancing the value of the goods and services they naturally produce. Examples from Spain's Basque Country, Mexico and Colombia illustrate how intense collaboration and innovation in the production process -- even in the production of what may seem to be basic commodities -- can lead to a virtuous circle of value optimization and economic development.
Swot Analysis of "Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point" written by Alejandro Ruelas-Gossi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vantage Basque facing as an external strategic factors. Some of the topics covered in Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point casestudy better are - – increasing transportation and logistics costs, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing government debt because of Covid-19 spendings, there is backlash against globalization, supply chains are disrupted by pandemic ,
increasing household debt because of falling income levels, technology disruption, etc
Introduction to SWOT Analysis of Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vantage Basque, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vantage Basque 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point can be done for the following purposes –
1. Strategic planning using facts provided in Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point case study
2. Improving business portfolio management of Vantage Basque
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 Vantage Basque
Strengths Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vantage Basque in Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point firm has clearly differentiated products in the market place. This has enabled Vantage Basque to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Vantage Basque to invest into research and development (R&D) and innovation.
Analytics focus
– Vantage Basque 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 Alejandro Ruelas-Gossi 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
- Vantage Basque 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 Vantage Basque is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Vantage Basque has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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.
Highly skilled collaborators
– Vantage Basque 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Vantage Basque digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vantage Basque 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.
Low bargaining power of suppliers
– Suppliers of Vantage Basque in the sector have low bargaining power. Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vantage Basque to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Vantage Basque is one of the most innovative firm in sector. Manager in Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Vantage Basque in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Vantage Basque is present in almost all the verticals within the industry. This has provided firm in Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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
– Vantage Basque is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Vantage Basque 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point, in the dynamic environment Vantage Basque has struggled to respond to the nimble upstart competition. Vantage Basque has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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 Vantage Basque has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Vantage Basque 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point, is just above the industry average. Vantage Basque 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.
Slow decision making process
– As mentioned earlier in the report, Vantage Basque 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. Vantage Basque 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.
Slow to strategic competitive environment developments
– As Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point HBR case study mentions - Vantage Basque 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.
Increasing silos among functional specialists
– The organizational structure of Vantage Basque is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Vantage Basque needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vantage Basque to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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 Vantage Basque 's lucrative customers.
Lack of clear differentiation of Vantage Basque products
– To increase the profitability and margins on the products, Vantage Basque needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Vantage Basque, firm in the HBR case study Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Vantage Basque 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point | 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point are -
Using analytics as competitive advantage
– Vantage Basque 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vantage Basque to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Vantage Basque can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vantage Basque 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vantage Basque 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.
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. Vantage Basque 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 Vantage Basque 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.
Learning at scale
– Online learning technologies has now opened space for Vantage Basque 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vantage Basque 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 Vantage Basque to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Vantage Basque has opened avenues for new revenue streams for the organization in the industry. This can help Vantage Basque to build a more holistic ecosystem as suggested in the Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point case study. Vantage Basque can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Vantage Basque to increase its market reach. Vantage Basque 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vantage Basque can use these opportunities to build new business models that can help the communities that Vantage Basque operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vantage Basque is facing challenges because of the dominance of functional experts in the organization. Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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.
Loyalty marketing
– Vantage Basque 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.
Threats Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point are -
Technology acceleration in Forth Industrial Revolution
– Vantage Basque has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Vantage Basque 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.
Stagnating economy with rate increase
– Vantage Basque 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
– Vantage Basque 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.
Consumer confidence and its impact on Vantage Basque 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.
High dependence on third party suppliers
– Vantage Basque 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point, Vantage Basque 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vantage Basque 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.
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 Vantage Basque business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Vantage Basque
– 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 Vantage Basque.
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 Vantage Basque in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Vantage Basque 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. Vantage Basque can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vantage Basque 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point .
Weighted SWOT Analysis of Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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 Escape the Low-Cost Trap & Enhance Value for Your Business: Crafting Your Vantage Point 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 Vantage Basque needs to make to build a sustainable competitive advantage.
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