Auchan in Syldavia: Formulating a strategy for the new subsidiary SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Auchan in Syldavia: Formulating a strategy for the new subsidiary
Michel Portal, a French executive with Auchan, has been appointed to lead a newly acquired subsidiary in the imaginary country of Syldavia. This case is based on a real situation that has been disguised for confidentiality reasons. The setting, Syldavia, is depicted as a transition economy and therefore fits in with the eastern and central European countries, although the case that inspired this situation is not situated in this part of the world but in Southern Europe. Auchan Syldavia is typical of a "taking charge" case study, where participants are expected to help Michel Portal, the new CEO, develop a strategy for his new assignment in a company that he is expected by upper management to turn around in a relatively short time span.
Swot Analysis of "Auchan in Syldavia: Formulating a strategy for the new subsidiary" written by Francis Bidault, Genevieve Feraud includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Syldavia Auchan facing as an external strategic factors. Some of the topics covered in Auchan in Syldavia: Formulating a strategy for the new subsidiary case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Auchan in Syldavia: Formulating a strategy for the new subsidiary casestudy better are - – wage bills are increasing, increasing transportation and logistics costs, technology disruption, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, increasing commodity prices, etc
Introduction to SWOT Analysis of Auchan in Syldavia: Formulating a strategy for the new subsidiary
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Auchan in Syldavia: Formulating a strategy for the new subsidiary case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Syldavia Auchan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Syldavia Auchan 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary can be done for the following purposes –
1. Strategic planning using facts provided in Auchan in Syldavia: Formulating a strategy for the new subsidiary case study
2. Improving business portfolio management of Syldavia Auchan
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 Syldavia Auchan
Strengths Auchan in Syldavia: Formulating a strategy for the new subsidiary | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Syldavia Auchan in Auchan in Syldavia: Formulating a strategy for the new subsidiary Harvard Business Review case study are -
Effective Research and Development (R&D)
– Syldavia Auchan 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Syldavia Auchan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Syldavia Auchan has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Strategy & Execution industry
– Auchan in Syldavia: Formulating a strategy for the new subsidiary firm has clearly differentiated products in the market place. This has enabled Syldavia Auchan to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Syldavia Auchan to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Syldavia Auchan in the sector have low bargaining power. Auchan in Syldavia: Formulating a strategy for the new subsidiary has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Syldavia Auchan to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Syldavia Auchan is one of the leading recruiters in the industry. Managers in the Auchan in Syldavia: Formulating a strategy for the new subsidiary are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Syldavia Auchan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Syldavia Auchan
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Syldavia Auchan does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Syldavia Auchan 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 Francis Bidault, Genevieve Feraud 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.
Superior customer experience
– The customer experience strategy of Syldavia Auchan in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Syldavia Auchan 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.
Training and development
– Syldavia Auchan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Auchan in Syldavia: Formulating a strategy for the new subsidiary 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.
Successful track record of launching new products
– Syldavia Auchan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Syldavia Auchan has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Auchan in Syldavia: Formulating a strategy for the new subsidiary | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Auchan in Syldavia: Formulating a strategy for the new subsidiary are -
No frontier risks strategy
– After analyzing the HBR case study Auchan in Syldavia: Formulating a strategy for the new subsidiary, 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.
Slow to strategic competitive environment developments
– As Auchan in Syldavia: Formulating a strategy for the new subsidiary HBR case study mentions - Syldavia Auchan 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 star products
– The top 2 products and services of the firm as mentioned in the Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Syldavia Auchan has relatively successful track record of launching new products.
Need for greater diversity
– Syldavia Auchan 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Auchan in Syldavia: Formulating a strategy for the new subsidiary, in the dynamic environment Syldavia Auchan has struggled to respond to the nimble upstart competition. Syldavia Auchan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Syldavia Auchan 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Syldavia Auchan needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Syldavia Auchan 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary, is just above the industry average. Syldavia Auchan 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Syldavia Auchan is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Auchan in Syldavia: Formulating a strategy for the new subsidiary can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Syldavia Auchan 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 - Auchan in Syldavia: Formulating a strategy for the new subsidiary should strive to include more intangible value offerings along with its core products and services.
Opportunities Auchan in Syldavia: Formulating a strategy for the new subsidiary | 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Syldavia Auchan 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.
Buying journey improvements
– Syldavia Auchan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Auchan in Syldavia: Formulating a strategy for the new subsidiary 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, Syldavia Auchan 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.
Creating value in data economy
– The success of analytics program of Syldavia Auchan has opened avenues for new revenue streams for the organization in the industry. This can help Syldavia Auchan to build a more holistic ecosystem as suggested in the Auchan in Syldavia: Formulating a strategy for the new subsidiary case study. Syldavia Auchan can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Syldavia Auchan 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.
Developing new processes and practices
– Syldavia Auchan 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Syldavia Auchan is facing challenges because of the dominance of functional experts in the organization. Auchan in Syldavia: Formulating a strategy for the new subsidiary 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.
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. Syldavia Auchan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Syldavia Auchan 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 Syldavia Auchan to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Syldavia Auchan 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, Auchan in Syldavia: Formulating a strategy for the new subsidiary, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Syldavia Auchan 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.
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. Syldavia Auchan 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. Syldavia Auchan 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.
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 Syldavia Auchan in the consumer business. Now Syldavia Auchan can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Auchan in Syldavia: Formulating a strategy for the new subsidiary External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Auchan in Syldavia: Formulating a strategy for the new subsidiary are -
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. Syldavia Auchan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Syldavia Auchan 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 Syldavia Auchan in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Syldavia Auchan 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Syldavia Auchan 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. Syldavia Auchan needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Syldavia Auchan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Syldavia Auchan 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.
Shortening product life cycle
– it is one of the major threat that Syldavia Auchan 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. Syldavia Auchan 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.
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 Syldavia Auchan.
Weighted SWOT Analysis of Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Syldavia Auchan needs to make to build a sustainable competitive advantage.