Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA)
The director of warehousing and logistics at Volkswagen Group Canada (VGCA) had been tasked with analyzing the capacity of the Toronto parts distribution center to support an aggressive growth plan that involved a series of new product launches and product facelifts. Expecting that expansion of the facility would be necessary, the director needed to establish the additional warehouse capacity required, when it would be needed by and which expansion option made the most sense.
Swot Analysis of "Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA)" written by P. Fraser Johnson, Adam Bortolussi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vgca Warehousing facing as an external strategic factors. Some of the topics covered in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) case study are - Strategic Management Strategies, Marketing, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) casestudy better are - – talent flight as more people leaving formal jobs, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vgca Warehousing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vgca Warehousing 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) can be done for the following purposes –
1. Strategic planning using facts provided in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) case study
2. Improving business portfolio management of Vgca Warehousing
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 Vgca Warehousing
Strengths Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vgca Warehousing in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) Harvard Business Review case study are -
Learning organization
- Vgca Warehousing 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 Vgca Warehousing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Vgca Warehousing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vgca Warehousing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Vgca Warehousing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vgca Warehousing 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) firm has clearly differentiated products in the market place. This has enabled Vgca Warehousing to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Vgca Warehousing to invest into research and development (R&D) and innovation.
Innovation driven organization
– Vgca Warehousing is one of the most innovative firm in sector. Manager in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Vgca Warehousing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vgca Warehousing 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.
Operational resilience
– The operational resilience strategy in the Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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
– Vgca Warehousing 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 Vgca Warehousing are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High switching costs
– The high switching costs that Vgca Warehousing 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.
Highly skilled collaborators
– Vgca Warehousing 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Vgca Warehousing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA), in the dynamic environment Vgca Warehousing has struggled to respond to the nimble upstart competition. Vgca Warehousing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Vgca Warehousing has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Vgca Warehousing 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.
Need for greater diversity
– Vgca Warehousing 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.
Interest costs
– Compare to the competition, Vgca Warehousing 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA), is just above the industry average. Vgca Warehousing 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 bargaining power of channel partners
– Because of the regulatory requirements, P. Fraser Johnson, Adam Bortolussi suggests that, Vgca Warehousing 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.
Lack of clear differentiation of Vgca Warehousing products
– To increase the profitability and margins on the products, Vgca Warehousing needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Vgca Warehousing 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Vgca Warehousing 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.
Slow decision making process
– As mentioned earlier in the report, Vgca Warehousing has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Vgca Warehousing even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) | 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) are -
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 Vgca Warehousing in the consumer business. Now Vgca Warehousing can target international markets with far fewer capital restrictions requirements than the existing system.
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 Vgca Warehousing 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.
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. Vgca Warehousing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Vgca Warehousing to increase its market reach. Vgca Warehousing 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.
Developing new processes and practices
– Vgca Warehousing can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Vgca Warehousing to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vgca Warehousing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vgca Warehousing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vgca Warehousing is facing challenges because of the dominance of functional experts in the organization. Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Vgca Warehousing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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.
Building a culture of innovation
– managers at Vgca Warehousing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vgca Warehousing 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, Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Vgca Warehousing 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.
Threats Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) are -
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. Vgca Warehousing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Vgca Warehousing 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. Vgca Warehousing can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Vgca Warehousing.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vgca Warehousing 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) .
High dependence on third party suppliers
– Vgca Warehousing 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.
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. Vgca Warehousing 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.
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.
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 Vgca Warehousing in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Vgca Warehousing 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.
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. Vgca Warehousing needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vgca Warehousing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA), Vgca Warehousing 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 .
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 Vgca Warehousing business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Vgca Warehousing needs to make to build a sustainable competitive advantage.