Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
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, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, wage bills are increasing, geopolitical disruptions, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, supply chains are disrupted by pandemic , 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 -
Low bargaining power of suppliers
– Suppliers of Vgca Warehousing in the sector have low bargaining power. Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vgca Warehousing to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
Diverse revenue streams
– Vgca Warehousing is present in almost all the verticals within the industry. This has provided firm in Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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.
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.
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.
Ability to lead change in Strategy & Execution field
– Vgca Warehousing 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 Vgca Warehousing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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 -
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.
Products dominated business model
– Even though Vgca Warehousing 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 - Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vgca Warehousing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) 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 Vgca Warehousing 's lucrative customers.
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.
Low market penetration in new markets
– Outside its home market of Vgca Warehousing, firm in the HBR case study Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
High cash cycle compare to competitors
Vgca Warehousing 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.
Increasing silos among functional specialists
– The organizational structure of Vgca Warehousing is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Vgca Warehousing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vgca Warehousing to focus more on services rather than just following the product oriented approach.
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 -
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vgca Warehousing can use these opportunities to build new business models that can help the communities that Vgca Warehousing operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
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.
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.
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.
Using analytics as competitive advantage
– Vgca Warehousing 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 Warehousing Strategy at Volkswagen Group Canada Inc. (VGCA) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vgca Warehousing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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. Vgca Warehousing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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 -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vgca Warehousing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Vgca Warehousing has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Vgca Warehousing needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
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.
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.
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, 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) .
Stagnating economy with rate increase
– Vgca Warehousing 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 Vgca Warehousing
– 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 Vgca Warehousing.
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.
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.