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 - – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, 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 -

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.

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.

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.

Successful track record of launching new products

– Scorecard Fortune has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Scorecard Fortune 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.

High switching costs

– The high switching costs that Scorecard Fortune 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.

Ability to lead change in Strategy & Execution field

– Scorecard Fortune is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Scorecard Fortune in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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.

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.

Innovation driven organization

– Scorecard Fortune is one of the most innovative firm in sector. Manager in Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Highly skilled collaborators

– Scorecard Fortune 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

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.

Learning organization

- Scorecard Fortune 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 Scorecard Fortune is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

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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 -

Workers concerns about automation

– As automation is fast increasing in the segment, Scorecard Fortune 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 Scorecard Fortune products

– To increase the profitability and margins on the products, Scorecard Fortune needs to provide more differentiated products than what it is currently offering in the marketplace.

Need for greater diversity

– Scorecard Fortune 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.

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.

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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A), in the dynamic environment Scorecard Fortune has struggled to respond to the nimble upstart competition. Scorecard Fortune has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High operating costs

– Compare to the competitors, firm in the HBR case study Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) 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 Scorecard Fortune 's lucrative customers.

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.

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.

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.

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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 -

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.

Leveraging digital technologies

– Scorecard Fortune 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.

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 Scorecard Fortune 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Scorecard Fortune 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.

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.

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.

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.

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.

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.

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. Scorecard Fortune can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Creating value in data economy

– The success of analytics program of Scorecard Fortune has opened avenues for new revenue streams for the organization in the industry. This can help Scorecard Fortune to build a more holistic ecosystem as suggested in the Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) case study. Scorecard Fortune can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

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.

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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 -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A), Scorecard Fortune 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 .

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.

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.

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.

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.

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.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Scorecard Fortune 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 Fortune Motors (Taiwan): Implementing Strategy Change Using the Balanced Scorecard (A) .

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.

Consumer confidence and its impact on Scorecard Fortune demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.

Stagnating economy with rate increase

– 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Scorecard Fortune with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

High dependence on third party suppliers

– Scorecard Fortune 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.

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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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