The Basque Country: Strategy for Economic Development SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Basque Country: Strategy for Economic Development
The Basque country, with a population of 2.1 million and covering 7,233 square kilometers, is an autonomous region located in the north of Spain, physically separated from it by the Pyrenees mountains. Presents the history of the region--highly prosperous at the turn of the 20th century, but nearing bankruptcy by the 1950s. By 2001, the Basque GDP per capita had risen to a level well ahead of Spain and most European countries. At the same time that the region was enjoying the spoils of admirably executed cluster initiatives, it was being threatened by the destabilizing violence of the Basque separatist extreme, a slowing global economy, and an always-precarious balance of power between the Basque's own government and the government of Spain.
Authors :: Michael E. Porter, Christian H.M. Ketels, Jesus M Valdaliso
Swot Analysis of "The Basque Country: Strategy for Economic Development" written by Michael E. Porter, Christian H.M. Ketels, Jesus M Valdaliso includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Basque Spain facing as an external strategic factors. Some of the topics covered in The Basque Country: Strategy for Economic Development case study are - Strategic Management Strategies, Business law, Competition, Competitive strategy, Economics, Emerging markets, Ethics, Policy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Basque Country: Strategy for Economic Development casestudy better are - – central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, wage bills are increasing, increasing household debt because of falling income levels, increasing commodity prices, technology disruption,
increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of The Basque Country: Strategy for Economic Development
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Basque Country: Strategy for Economic Development case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Basque Spain, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Basque Spain 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 The Basque Country: Strategy for Economic Development can be done for the following purposes –
1. Strategic planning using facts provided in The Basque Country: Strategy for Economic Development case study
2. Improving business portfolio management of Basque Spain
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 Basque Spain
Strengths The Basque Country: Strategy for Economic Development | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Basque Spain in The Basque Country: Strategy for Economic Development Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the The Basque Country: Strategy for Economic Development 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.
Analytics focus
– Basque Spain 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 Michael E. Porter, Christian H.M. Ketels, Jesus M Valdaliso 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Basque Spain digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Basque Spain 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
– Basque Spain is one of the most innovative firm in sector. Manager in The Basque Country: Strategy for Economic Development Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Basque Spain has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Basque Spain 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.
Highly skilled collaborators
– Basque Spain 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 The Basque Country: Strategy for Economic Development HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Basque Spain
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Basque Spain does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Basque Spain 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 Basque Spain 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.
Low bargaining power of suppliers
– Suppliers of Basque Spain in the sector have low bargaining power. The Basque Country: Strategy for Economic Development has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Basque Spain to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Basque Spain is one of the leading recruiters in the industry. Managers in the The Basque Country: Strategy for Economic Development are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Basque Spain has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Basque Spain to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses The Basque Country: Strategy for Economic Development | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Basque Country: Strategy for Economic Development are -
Interest costs
– Compare to the competition, Basque Spain 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.
Slow to strategic competitive environment developments
– As The Basque Country: Strategy for Economic Development HBR case study mentions - Basque Spain 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.
Need for greater diversity
– Basque Spain 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.
Products dominated business model
– Even though Basque Spain 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 - The Basque Country: Strategy for Economic Development should strive to include more intangible value offerings along with its core products and services.
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 Basque Spain supply chain. Even after few cautionary changes mentioned in the HBR case study - The Basque Country: Strategy for Economic Development, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Basque Spain vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study The Basque Country: Strategy for Economic Development 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 Basque Spain 's lucrative customers.
Lack of clear differentiation of Basque Spain products
– To increase the profitability and margins on the products, Basque Spain needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Basque Spain is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Basque Country: Strategy for Economic Development can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Basque Spain 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.
Aligning sales with marketing
– It come across in the case study The Basque Country: Strategy for Economic Development 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 The Basque Country: Strategy for Economic Development can leverage the sales team experience to cultivate customer relationships as Basque Spain is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Basque Country: Strategy for Economic Development, is just above the industry average. Basque Spain 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 The Basque Country: Strategy for Economic Development | 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 The Basque Country: Strategy for Economic Development are -
Better consumer reach
– The expansion of the 5G network will help Basque Spain to increase its market reach. Basque Spain 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.
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. Basque Spain can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Basque Spain 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.
Using analytics as competitive advantage
– Basque Spain 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 The Basque Country: Strategy for Economic Development - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Basque Spain to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Basque Spain 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Basque Spain can use these opportunities to build new business models that can help the communities that Basque Spain operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Basque Spain 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.
Buying journey improvements
– Basque Spain can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Basque Country: Strategy for Economic Development 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Basque Spain can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Basque Spain in the consumer business. Now Basque Spain can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Basque Spain 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Basque Spain 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 Basque Spain to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Basque Spain 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, The Basque Country: Strategy for Economic Development, 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 The Basque Country: Strategy for Economic Development External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Basque Country: Strategy for Economic Development 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 The Basque Country: Strategy for Economic Development, Basque Spain 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 .
Consumer confidence and its impact on Basque Spain 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.
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.
Shortening product life cycle
– it is one of the major threat that Basque Spain is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Basque Spain business can come under increasing regulations regarding data privacy, data security, etc.
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. Basque Spain needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Basque Spain can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Basque Spain 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.
Increasing wage structure of Basque Spain
– 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 Basque Spain.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Basque Spain in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Basque Spain 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Basque Spain 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 The Basque Country: Strategy for Economic Development .
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 Basque Spain in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of The Basque Country: Strategy for Economic Development 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 The Basque Country: Strategy for Economic Development 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 The Basque Country: Strategy for Economic Development 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 The Basque Country: Strategy for Economic Development 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 The Basque Country: Strategy for Economic Development 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 Basque Spain needs to make to build a sustainable competitive advantage.