Saturn: A Different Kind of Car Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Saturn: A Different Kind of Car Company
Saturn was General Motors' (GM) response to Japanese companies' dominance of the small car market during the mid-1980s. In the three-and-a-half years since its first sedan rolled off the assembly line, the Saturn Corp. had accumulated an impressive list of achievements. In April, 1994 Saturn's top management team met with GM's leadership to discuss the subsidiary's business plan. As Saturn's president reflected on the company's future and on his experience at GM, he felt confident that the executive committee would approve expansion if the Saturn team showed that it had achieved a sustainable position. Illustrates strategic analysis of sustainable competitive advantage.
Swot Analysis of "Saturn: A Different Kind of Car Company" written by Anita M. McGahan, Greg Keller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Saturn Saturn's facing as an external strategic factors. Some of the topics covered in Saturn: A Different Kind of Car Company case study are - Strategic Management Strategies, Decision making, Economics, Organizational structure and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Saturn: A Different Kind of Car Company casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, technology disruption,
increasing energy prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Saturn: A Different Kind of Car Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Saturn: A Different Kind of Car Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Saturn Saturn's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Saturn Saturn'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 Saturn: A Different Kind of Car Company can be done for the following purposes –
1. Strategic planning using facts provided in Saturn: A Different Kind of Car Company case study
2. Improving business portfolio management of Saturn Saturn'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 Saturn Saturn's
Strengths Saturn: A Different Kind of Car Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Saturn Saturn's in Saturn: A Different Kind of Car Company Harvard Business Review case study are -
Organizational Resilience of Saturn Saturn's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Saturn Saturn's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Saturn Saturn's is one of the leading recruiters in the industry. Managers in the Saturn: A Different Kind of Car Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Saturn Saturn's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Saturn Saturn's 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.
Diverse revenue streams
– Saturn Saturn's is present in almost all the verticals within the industry. This has provided firm in Saturn: A Different Kind of Car Company 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Saturn: A Different Kind of Car Company firm has clearly differentiated products in the market place. This has enabled Saturn Saturn's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Saturn Saturn's to invest into research and development (R&D) and innovation.
Training and development
– Saturn Saturn's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Saturn: A Different Kind of Car Company 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.
Low bargaining power of suppliers
– Suppliers of Saturn Saturn's in the sector have low bargaining power. Saturn: A Different Kind of Car Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Saturn Saturn's to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Saturn Saturn's 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 Saturn Saturn's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Saturn Saturn's 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 Saturn Saturn's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Saturn: A Different Kind of Car Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Saturn Saturn'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.
Innovation driven organization
– Saturn Saturn's is one of the most innovative firm in sector. Manager in Saturn: A Different Kind of Car Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Saturn Saturn's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Saturn: A Different Kind of Car Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Saturn: A Different Kind of Car Company are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Saturn: A Different Kind of Car Company 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 Saturn Saturn's has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Saturn Saturn's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Saturn Saturn's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Saturn Saturn's to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Saturn Saturn'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.
No frontier risks strategy
– After analyzing the HBR case study Saturn: A Different Kind of Car Company, 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.
Aligning sales with marketing
– It come across in the case study Saturn: A Different Kind of Car Company 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 Saturn: A Different Kind of Car Company can leverage the sales team experience to cultivate customer relationships as Saturn Saturn's is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Saturn Saturn's supply chain. Even after few cautionary changes mentioned in the HBR case study - Saturn: A Different Kind of Car Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Saturn Saturn's vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Saturn: A Different Kind of Car Company, is just above the industry average. Saturn Saturn'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.
Need for greater diversity
– Saturn Saturn's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Saturn: A Different Kind of Car Company, in the dynamic environment Saturn Saturn's has struggled to respond to the nimble upstart competition. Saturn Saturn's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Saturn Saturn's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Saturn: A Different Kind of Car Company 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 Saturn Saturn's 's lucrative customers.
Opportunities Saturn: A Different Kind of Car Company | 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 Saturn: A Different Kind of Car Company are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Saturn Saturn's 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, Saturn Saturn's is facing challenges because of the dominance of functional experts in the organization. Saturn: A Different Kind of Car Company 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
– Saturn Saturn's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Saturn: A Different Kind of Car Company 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Saturn Saturn'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.
Developing new processes and practices
– Saturn Saturn's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Saturn Saturn'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 Saturn Saturn'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 Saturn Saturn's in the consumer business. Now Saturn Saturn's can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Saturn Saturn's can use these opportunities to build new business models that can help the communities that Saturn Saturn's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Saturn Saturn'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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Saturn Saturn's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Saturn Saturn's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Saturn Saturn's to increase its market reach. Saturn Saturn'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.
Leveraging digital technologies
– Saturn Saturn's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Saturn Saturn'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, Saturn: A Different Kind of Car Company, 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 Saturn: A Different Kind of Car Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Saturn: A Different Kind of Car Company are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Saturn Saturn's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Saturn: A Different Kind of Car Company, Saturn Saturn'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 .
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 Saturn Saturn's.
Environmental challenges
– Saturn Saturn'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. Saturn Saturn's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Saturn Saturn's 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.
Increasing wage structure of Saturn Saturn's
– 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 Saturn Saturn's.
High dependence on third party suppliers
– Saturn Saturn's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Saturn Saturn'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.
Technology acceleration in Forth Industrial Revolution
– Saturn Saturn's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Saturn Saturn's 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.
Shortening product life cycle
– it is one of the major threat that Saturn Saturn's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Saturn Saturn's 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 Saturn: A Different Kind of Car Company .
Consumer confidence and its impact on Saturn Saturn'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.
Weighted SWOT Analysis of Saturn: A Different Kind of Car Company 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 Saturn: A Different Kind of Car Company 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 Saturn: A Different Kind of Car Company 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 Saturn: A Different Kind of Car Company 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 Saturn: A Different Kind of Car Company 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 Saturn Saturn's needs to make to build a sustainable competitive advantage.
