Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management
This study of 453 supplier-automaker relationships in the United States, Japan, and Korea examines the extent to which automakers manage their "arm's-length" and "partner" suppliers differently. The findings indicate that U.S. automakers have historically managed the majority of their suppliers using an arm's-length model, Korean automakers have managed suppliers primarily as partners, and Japanese automakers have somewhat different relationships with suppliers depending on the nature (i.e., degree of asset specificity and value) of the component. Only Japanese automakers have strategically segmented suppliers in such a way as to realize many of the benefits of both the arm's-length as well as the partner models. Firms should think strategically about supplier management and should not have a "one-size fits-all" strategy for supplier management.
Authors :: Jeffrey H. Dyer, Dong Sung Cho, Wujin Chu
Swot Analysis of "Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management" written by Jeffrey H. Dyer, Dong Sung Cho, Wujin Chu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Automakers Arm's facing as an external strategic factors. Some of the topics covered in Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management case study are - Strategic Management Strategies, Organizational culture, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management casestudy better are - – increasing government debt because of Covid-19 spendings, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, etc
Introduction to SWOT Analysis of Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Automakers Arm's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Automakers Arm's 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 Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management can be done for the following purposes –
1. Strategic planning using facts provided in Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management case study
2. Improving business portfolio management of Automakers Arm's
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 Automakers Arm's
Strengths Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Automakers Arm's in Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management Harvard Business Review case study are -
High brand equity
– Automakers Arm's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Automakers Arm's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Automakers Arm's 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management firm has clearly differentiated products in the market place. This has enabled Automakers Arm's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Automakers Arm's to invest into research and development (R&D) and innovation.
Organizational Resilience of Automakers Arm's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Automakers Arm's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management 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.
Innovation driven organization
– Automakers Arm's is one of the most innovative firm in sector. Manager in Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Automakers Arm's is one of the leading recruiters in the industry. Managers in the Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Automakers Arm's is present in almost all the verticals within the industry. This has provided firm in Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management 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.
Cross disciplinary teams
– Horizontal connected teams at the Automakers Arm's 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
– Automakers Arm's 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 Jeffrey H. Dyer, Dong Sung Cho, Wujin Chu 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.
Effective Research and Development (R&D)
– Automakers Arm's 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 Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Automakers Arm's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management 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.
Weaknesses Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management are -
Capital Spending Reduction
– Even during the low interest decade, Automakers Arm's 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 Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management, is just above the industry average. Automakers Arm's 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.
Products dominated business model
– Even though Automakers Arm's 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 - Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Jeffrey H. Dyer, Dong Sung Cho, Wujin Chu suggests that, Automakers Arm's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Workers concerns about automation
– As automation is fast increasing in the segment, Automakers Arm's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management, it seems that the employees of Automakers Arm's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management HBR case study mentions - Automakers Arm's 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.
No frontier risks strategy
– After analyzing the HBR case study Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management, in the dynamic environment Automakers Arm's has struggled to respond to the nimble upstart competition. Automakers Arm's 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 Automakers Arm's 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.
Interest costs
– Compare to the competition, Automakers Arm's 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.
Opportunities Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management | 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 Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Automakers Arm's 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 Automakers Arm's to hire the very best people irrespective of their geographical location.
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 Automakers Arm's in the consumer business. Now Automakers Arm's can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Automakers Arm's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management 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.
Learning at scale
– Online learning technologies has now opened space for Automakers Arm's 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.
Manufacturing automation
– Automakers Arm's 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Automakers Arm's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Automakers Arm's 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.
Better consumer reach
– The expansion of the 5G network will help Automakers Arm's to increase its market reach. Automakers Arm's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Automakers Arm's 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.
Creating value in data economy
– The success of analytics program of Automakers Arm's has opened avenues for new revenue streams for the organization in the industry. This can help Automakers Arm's to build a more holistic ecosystem as suggested in the Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management case study. Automakers Arm's can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Automakers Arm's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Automakers Arm's 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 Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Automakers Arm's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Automakers Arm's 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, Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management are -
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 Automakers Arm's in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management, Automakers Arm's 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 .
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. Automakers Arm's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Automakers Arm's 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.
Shortening product life cycle
– it is one of the major threat that Automakers Arm's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Regulatory challenges
– Automakers Arm's 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.
Environmental challenges
– Automakers Arm's 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. Automakers Arm's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Stagnating economy with rate increase
– Automakers Arm's 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 Automakers Arm's business can come under increasing regulations regarding data privacy, data security, etc.
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. Automakers Arm's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Automakers Arm's 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.
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.
Weighted SWOT Analysis of Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management 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 Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management 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 Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management 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 Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management 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 Strategic Supplier Segmentation: The Next "Best Practice" in Supply Chain Management 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 Automakers Arm's needs to make to build a sustainable competitive advantage.
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