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 - – technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, wage bills are increasing, talent flight as more people leaving formal jobs, increasing energy prices, supply chains are disrupted by pandemic ,
customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, 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 -
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.
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.
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.
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.
Highly skilled collaborators
– Syldavia Auchan 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Syldavia Auchan 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.
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 -
Low market penetration in new markets
– Outside its home market of Syldavia Auchan, firm in the HBR case study Auchan in Syldavia: Formulating a strategy for the new subsidiary needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
High cash cycle compare to competitors
Syldavia Auchan has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
Lack of clear differentiation of Syldavia Auchan products
– To increase the profitability and margins on the products, Syldavia Auchan needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Interest costs
– Compare to the competition, Syldavia Auchan has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, firm in the HBR case study Auchan in Syldavia: Formulating a strategy for the new subsidiary 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 Syldavia Auchan 's lucrative customers.
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.
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.
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 -
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.
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.
Leveraging digital technologies
– Syldavia Auchan can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, 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.
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.
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.
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 Syldavia Auchan 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Syldavia Auchan to increase its market reach. Syldavia Auchan will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– 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.
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.
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 -
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.
Environmental challenges
– Syldavia Auchan 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. Syldavia Auchan can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Syldavia Auchan 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.
Increasing wage structure of Syldavia Auchan
– 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 Syldavia Auchan.
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 Auchan in Syldavia: Formulating a strategy for the new subsidiary, Syldavia Auchan 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 .
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Syldavia Auchan 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 Auchan in Syldavia: Formulating a strategy for the new subsidiary .
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.
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.
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.
