NASCAR: Every Second Counts - Helping Win from the Pits SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of NASCAR: Every Second Counts - Helping Win from the Pits
In 2006 Andy Papathanassiou was faced with a new dilemma. After 15 years of working within the racing world of NASCAR, as athletic director for HMS, he was searching for the next breakthrough to improve pit crew performance. Earlier in his career, he had successfully halved pit times and changed standards across the racing industry by introducing athletic training and transforming pit crew members into pit athletes. In doing so, Papa created a legacy in motorsports and transformed auto racing. Papa's instinct was that within the matching process of assigning pit positions existed an opportunity that would improve performance. Papa was looking for ways to elevate the system dynamic whether it be "man or the machine." The next breakthrough would most likely be less dramatic than the first, though no less important. Fractions of a second could determine whether a race was won or lost. Other contributing factors were the continued evolution of racing, new automotive technologies and NASCAR's regular changing of the rules to keep the playing field level. Learning objectives: To illustrate operational process improvement methods, like lean, and open innovative techniques that can lead to improved performance and productivity in time-based competition. The case uses the concept and illustration of knowledge brokering techniques - using old ideas to find new answers and solutions for problems and how this can be applied to improve performance. It is a platform for considering improvement approaches in interconnected time-based production or service systems. The case also questions what will be the next breakthrough in performance and promotes discussion as to whether it will be a human or technological element.
Swot Analysis of "NASCAR: Every Second Counts - Helping Win from the Pits" written by Corey Billington, Michele Barnett Berg, Atul Pahwa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pit Racing facing as an external strategic factors. Some of the topics covered in NASCAR: Every Second Counts - Helping Win from the Pits case study are - Strategic Management Strategies, Competitive strategy and Technology & Operations.
Some of the macro environment factors that can be used to understand the NASCAR: Every Second Counts - Helping Win from the Pits casestudy better are - – there is backlash against globalization, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, technology disruption, increasing commodity prices,
wage bills are increasing, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of NASCAR: Every Second Counts - Helping Win from the Pits
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NASCAR: Every Second Counts - Helping Win from the Pits case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pit Racing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pit Racing 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 NASCAR: Every Second Counts - Helping Win from the Pits can be done for the following purposes –
1. Strategic planning using facts provided in NASCAR: Every Second Counts - Helping Win from the Pits case study
2. Improving business portfolio management of Pit Racing
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pit Racing
Strengths NASCAR: Every Second Counts - Helping Win from the Pits | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pit Racing in NASCAR: Every Second Counts - Helping Win from the Pits Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– NASCAR: Every Second Counts - Helping Win from the Pits firm has clearly differentiated products in the market place. This has enabled Pit Racing to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Pit Racing to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the NASCAR: Every Second Counts - Helping Win from the Pits 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.
High switching costs
– The high switching costs that Pit Racing 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.
Analytics focus
– Pit Racing 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 Corey Billington, Michele Barnett Berg, Atul Pahwa 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.
Successful track record of launching new products
– Pit Racing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pit Racing 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
– Pit Racing is present in almost all the verticals within the industry. This has provided firm in NASCAR: Every Second Counts - Helping Win from the Pits 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.
High brand equity
– Pit Racing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pit Racing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Pit Racing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pit Racing 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.
Training and development
– Pit Racing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in NASCAR: Every Second Counts - Helping Win from the Pits 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.
Highly skilled collaborators
– Pit Racing 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 NASCAR: Every Second Counts - Helping Win from the Pits HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Pit Racing has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study NASCAR: Every Second Counts - Helping Win from the Pits - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Pit Racing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pit Racing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses NASCAR: Every Second Counts - Helping Win from the Pits | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NASCAR: Every Second Counts - Helping Win from the Pits are -
Increasing silos among functional specialists
– The organizational structure of Pit Racing is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Pit Racing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pit Racing to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As NASCAR: Every Second Counts - Helping Win from the Pits HBR case study mentions - Pit Racing takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study NASCAR: Every Second Counts - Helping Win from the Pits, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Slow decision making process
– As mentioned earlier in the report, Pit Racing 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. Pit Racing 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the NASCAR: Every Second Counts - Helping Win from the Pits 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 Pit Racing has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study NASCAR: Every Second Counts - Helping Win from the Pits, in the dynamic environment Pit Racing has struggled to respond to the nimble upstart competition. Pit Racing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Pit Racing supply chain. Even after few cautionary changes mentioned in the HBR case study - NASCAR: Every Second Counts - Helping Win from the Pits, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pit Racing vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Pit Racing products
– To increase the profitability and margins on the products, Pit Racing 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, Pit Racing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study NASCAR: Every Second Counts - Helping Win from the Pits can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Pit Racing 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study NASCAR: Every Second Counts - Helping Win from the Pits, is just above the industry average. Pit Racing 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 NASCAR: Every Second Counts - Helping Win from the Pits | 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 NASCAR: Every Second Counts - Helping Win from the Pits are -
Loyalty marketing
– Pit Racing has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Pit Racing has opened avenues for new revenue streams for the organization in the industry. This can help Pit Racing to build a more holistic ecosystem as suggested in the NASCAR: Every Second Counts - Helping Win from the Pits case study. Pit Racing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Pit Racing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. NASCAR: Every Second Counts - Helping Win from the Pits 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 Pit Racing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pit Racing 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. Pit Racing 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.
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 Pit Racing in the consumer business. Now Pit Racing can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Pit Racing 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 Technology & Operations segment.
Leveraging digital technologies
– Pit Racing 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.
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. Pit Racing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Pit Racing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pit Racing is facing challenges because of the dominance of functional experts in the organization. NASCAR: Every Second Counts - Helping Win from the Pits 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pit Racing 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 Pit Racing to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Pit Racing can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Threats NASCAR: Every Second Counts - Helping Win from the Pits External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NASCAR: Every Second Counts - Helping Win from the Pits are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pit Racing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Pit Racing 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.
Increasing wage structure of Pit Racing
– 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 Pit Racing.
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.
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. Pit Racing 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.
Shortening product life cycle
– it is one of the major threat that Pit Racing is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Pit Racing 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 Technology & Operations industry regulations.
High dependence on third party suppliers
– Pit Racing 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.
Stagnating economy with rate increase
– Pit Racing 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.
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 Pit Racing.
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 NASCAR: Every Second Counts - Helping Win from the Pits, Pit Racing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pit Racing 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 NASCAR: Every Second Counts - Helping Win from the Pits .
Weighted SWOT Analysis of NASCAR: Every Second Counts - Helping Win from the Pits 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 NASCAR: Every Second Counts - Helping Win from the Pits 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 NASCAR: Every Second Counts - Helping Win from the Pits 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 NASCAR: Every Second Counts - Helping Win from the Pits 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 NASCAR: Every Second Counts - Helping Win from the Pits 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 Pit Racing needs to make to build a sustainable competitive advantage.