OnStar: Not Your Father's General Motors SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of OnStar: Not Your Father's General Motors
After two years of less than stellar performance resulting in sales well below plan, senior management at General Motors (GM) mobile telecommunications service start-up, OnStar, recognized that without a substantial change in their strategy, support for the venture would dwindle. Chet Huber (HBS 1979) faced one of the toughest decisions of his career. He had to decide whether to press GM executives to approve a plan to factory install OnStar hardware on every vehicle it manufactured-a new strategy requiring a dramatic increase in the corporation's commitment to the struggling technology venture. The alternative would be to continue with the current strategy of selling OnStar as an aftermarket product at GM dealerships. GM produced over five million new vehicles a year. Installing OnStar on every vehicle could exponentially increase the subscriber base but would cost hundreds of millions of dollars and lead to an unknown number of changes both within OnStar and at GM factories.
Swot Analysis of "OnStar: Not Your Father's General Motors" written by Clayton M. Christensen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Onstar Gm facing as an external strategic factors. Some of the topics covered in OnStar: Not Your Father's General Motors case study are - Strategic Management Strategies, Decision making, Entrepreneurship, Growth strategy, Innovation, Joint ventures, Marketing, Risk management, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the OnStar: Not Your Father's General Motors casestudy better are - – technology disruption, increasing household debt because of falling income levels, there is backlash against globalization, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models,
challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of OnStar: Not Your Father's General Motors
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in OnStar: Not Your Father's General Motors case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Onstar Gm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Onstar Gm 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 OnStar: Not Your Father's General Motors can be done for the following purposes –
1. Strategic planning using facts provided in OnStar: Not Your Father's General Motors case study
2. Improving business portfolio management of Onstar Gm
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 Onstar Gm
Strengths OnStar: Not Your Father's General Motors | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Onstar Gm in OnStar: Not Your Father's General Motors Harvard Business Review case study are -
Highly skilled collaborators
– Onstar Gm 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 OnStar: Not Your Father's General Motors HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Onstar Gm 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 Clayton M. Christensen 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.
Learning organization
- Onstar Gm 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 Onstar Gm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in OnStar: Not Your Father's General Motors Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Onstar Gm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Onstar Gm has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Onstar Gm is one of the most innovative firm in sector. Manager in OnStar: Not Your Father's General Motors Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the OnStar: Not Your Father's General Motors 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.
Training and development
– Onstar Gm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in OnStar: Not Your Father's General Motors 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.
Diverse revenue streams
– Onstar Gm is present in almost all the verticals within the industry. This has provided firm in OnStar: Not Your Father's General Motors 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.
Ability to lead change in Technology & Operations field
– Onstar Gm 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 Onstar Gm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Technology & Operations industry
– OnStar: Not Your Father's General Motors firm has clearly differentiated products in the market place. This has enabled Onstar Gm to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Onstar Gm to invest into research and development (R&D) and innovation.
High brand equity
– Onstar Gm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Onstar Gm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Onstar Gm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Onstar Gm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses OnStar: Not Your Father's General Motors | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of OnStar: Not Your Father's General Motors are -
No frontier risks strategy
– After analyzing the HBR case study OnStar: Not Your Father's General Motors, 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Onstar Gm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study OnStar: Not Your Father's General Motors 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the OnStar: Not Your Father's General Motors 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 Onstar Gm has relatively successful track record of launching new products.
High cash cycle compare to competitors
Onstar Gm 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 OnStar: Not Your Father's General Motors, is just above the industry average. Onstar Gm 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.
Low market penetration in new markets
– Outside its home market of Onstar Gm, firm in the HBR case study OnStar: Not Your Father's General Motors needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Onstar Gm 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 - OnStar: Not Your Father's General Motors should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As OnStar: Not Your Father's General Motors HBR case study mentions - Onstar Gm 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.
Capital Spending Reduction
– Even during the low interest decade, Onstar Gm 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.
Slow decision making process
– As mentioned earlier in the report, Onstar Gm 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. Onstar Gm 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.
Increasing silos among functional specialists
– The organizational structure of Onstar Gm is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Onstar Gm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Onstar Gm to focus more on services rather than just following the product oriented approach.
Opportunities OnStar: Not Your Father's General Motors | 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 OnStar: Not Your Father's General Motors are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Onstar Gm can use these opportunities to build new business models that can help the communities that Onstar Gm operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Developing new processes and practices
– Onstar Gm can develop new processes and procedures in Technology & Operations 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.
Creating value in data economy
– The success of analytics program of Onstar Gm has opened avenues for new revenue streams for the organization in the industry. This can help Onstar Gm to build a more holistic ecosystem as suggested in the OnStar: Not Your Father's General Motors case study. Onstar Gm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Onstar Gm 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. Onstar Gm 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.
Buying journey improvements
– Onstar Gm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. OnStar: Not Your Father's General Motors 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.
Better consumer reach
– The expansion of the 5G network will help Onstar Gm to increase its market reach. Onstar Gm 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.
Learning at scale
– Online learning technologies has now opened space for Onstar Gm 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.
Building a culture of innovation
– managers at Onstar Gm 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.
Using analytics as competitive advantage
– Onstar Gm 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 OnStar: Not Your Father's General Motors - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Onstar Gm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Onstar Gm can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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. Onstar Gm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Onstar Gm 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, OnStar: Not Your Father's General Motors, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Onstar Gm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats OnStar: Not Your Father's General Motors External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study OnStar: Not Your Father's General Motors are -
Technology acceleration in Forth Industrial Revolution
– Onstar Gm has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Onstar Gm needs to keep up with the evolution of technology in the Technology & Operations 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.
Stagnating economy with rate increase
– Onstar Gm 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.
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 Onstar Gm business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Onstar Gm 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Onstar Gm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Onstar Gm 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.
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. Onstar Gm needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Environmental challenges
– Onstar Gm 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. Onstar Gm can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Onstar Gm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Onstar Gm in the Technology & Operations sector and impact the bottomline of the organization.
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. Onstar Gm 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Onstar Gm in the Technology & Operations industry. The Technology & Operations 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.
Weighted SWOT Analysis of OnStar: Not Your Father's General Motors 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 OnStar: Not Your Father's General Motors 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 OnStar: Not Your Father's General Motors 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 OnStar: Not Your Father's General Motors 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 OnStar: Not Your Father's General Motors 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 Onstar Gm needs to make to build a sustainable competitive advantage.
