Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A)

The chief executive officer (CEO) of Fortune Motors, the largest Mitsubishi dealership in Taiwan, has to consider his vision for the survival of the company. Fortune Motors' sales in 2003 had fallen below 50,000 units for the first time in 10 years, and market share had been falling for several years. The CEO had a plan to enter the business of financing used-car purchases. He thought that the "balanced scorecard" would be a useful tool to help him implement this change. The first step was to construct a corporate scorecard.

Authors :: David J. Sharp, Anne Wu

Topics :: Strategy & Execution

Tags :: Competitive strategy, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A)" written by David J. Sharp, Anne Wu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Scorecard Fortune facing as an external strategic factors. Some of the topics covered in Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) case study are - Strategic Management Strategies, Competitive strategy and Strategy & Execution.

Some of the macro environment factors that can be used to understand the Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) casestudy better are - – central banks are concerned over increasing inflation, geopolitical disruptions, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing energy prices, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, etc

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Introduction to SWOT Analysis of Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A)

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Scorecard Fortune, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Scorecard Fortune 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) can be done for the following purposes –
1. Strategic planning using facts provided in Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) case study
2. Improving business portfolio management of Scorecard Fortune
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 Scorecard Fortune

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Strengths Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Scorecard Fortune in Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) Harvard Business Review case study are -

High brand equity

– Scorecard Fortune has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Scorecard Fortune to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Operational resilience

– The operational resilience strategy in the Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Strong track record of project management

– Scorecard Fortune is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Training and development

– Scorecard Fortune has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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.

Diverse revenue streams

– Scorecard Fortune is present in almost all the verticals within the industry. This has provided firm in Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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.

Effective Research and Development (R&D)

– Scorecard Fortune 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Superior customer experience

– The customer experience strategy of Scorecard Fortune in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Analytics focus

– Scorecard Fortune 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 David J. Sharp, Anne Wu 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.

Cross disciplinary teams

– Horizontal connected teams at the Scorecard Fortune 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.

Digital Transformation in Strategy & Execution segment

- digital transformation varies from industry to industry. For Scorecard Fortune digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Scorecard Fortune 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 Scorecard Fortune in the sector have low bargaining power. Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Scorecard Fortune to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Scorecard Fortune is one of the leading recruiters in the industry. Managers in the Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

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Weaknesses Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) are -

High cash cycle compare to competitors

Scorecard Fortune 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.

Capital Spending Reduction

– Even during the low interest decade, Scorecard Fortune 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A), is just above the industry average. Scorecard Fortune 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, Scorecard Fortune is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Skills based hiring

– The stress on hiring functional specialists at Scorecard Fortune 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.

Increasing silos among functional specialists

– The organizational structure of Scorecard Fortune is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Scorecard Fortune needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Scorecard Fortune to focus more on services rather than just following the product oriented approach.

Aligning sales with marketing

– It come across in the case study Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) can leverage the sales team experience to cultivate customer relationships as Scorecard Fortune is planning to shift buying processes online.

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 Scorecard Fortune supply chain. Even after few cautionary changes mentioned in the HBR case study - Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Scorecard Fortune vulnerable to further global disruptions in South East Asia.

Interest costs

– Compare to the competition, Scorecard Fortune 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.

No frontier risks strategy

– After analyzing the HBR case study Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A), 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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 Scorecard Fortune has relatively successful track record of launching new products.

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Opportunities Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) | 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) are -

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Scorecard Fortune 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, Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Loyalty marketing

– Scorecard Fortune 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.

Using analytics as competitive advantage

– Scorecard Fortune 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Scorecard Fortune to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Scorecard Fortune can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Low interest rates

– Even though inflation is raising its head in most developed economies, Scorecard Fortune 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 Scorecard Fortune in the consumer business. Now Scorecard Fortune can target international markets with far fewer capital restrictions requirements than the existing system.

Buying journey improvements

– Scorecard Fortune can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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.

Manufacturing automation

– Scorecard Fortune 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.

Better consumer reach

– The expansion of the 5G network will help Scorecard Fortune to increase its market reach. Scorecard Fortune 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.

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. Scorecard Fortune 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. Scorecard Fortune 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.

Learning at scale

– Online learning technologies has now opened space for Scorecard Fortune 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 Scorecard Fortune 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 Scorecard Fortune to hire the very best people irrespective of their geographical location.

Building a culture of innovation

– managers at Scorecard Fortune 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.

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Threats Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) are -

Technology acceleration in Forth Industrial Revolution

– Scorecard Fortune has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Scorecard Fortune 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.

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 Scorecard Fortune business can come under increasing regulations regarding data privacy, data security, etc.

Increasing wage structure of Scorecard Fortune

– 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 Scorecard Fortune.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Scorecard Fortune 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.

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 Scorecard Fortune in the Strategy & Execution sector and impact the bottomline of the organization.

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 Scorecard Fortune.

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. Scorecard Fortune needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.

Environmental challenges

– Scorecard Fortune 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. Scorecard Fortune can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.

Stagnating economy with rate increase

– Scorecard Fortune 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

– Scorecard Fortune 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.

Shortening product life cycle

– it is one of the major threat that Scorecard Fortune 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. Scorecard Fortune 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.

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. Scorecard Fortune can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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Weighted SWOT Analysis of Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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 Scorecard Fortune needs to make to build a sustainable competitive advantage.

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