Ventramex and the Mexican Peso Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ventramex and the Mexican Peso Crisis
After a substantial devaluation of Mexican currency, a major automaker attempts to reduce the price it is paying to a Mexican-based supplier. The supplier (Ventramex) is put in a difficult position because a large portion of its costs are based in U.S. dollars. The company must decide how to respond to the automaker while considering options that would increase the proportion of its costs that are based in Mexican pesos.
Authors :: John Kamauff, Michiel R. Leenders, David L. Ager, Daniel D. Campbell
Swot Analysis of "Ventramex and the Mexican Peso Crisis" written by John Kamauff, Michiel R. Leenders, David L. Ager, Daniel D. Campbell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mexican Ventramex facing as an external strategic factors. Some of the topics covered in Ventramex and the Mexican Peso Crisis case study are - Strategic Management Strategies, International business, Pricing, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Ventramex and the Mexican Peso Crisis casestudy better are - – supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, technology disruption, increasing energy prices, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Ventramex and the Mexican Peso Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ventramex and the Mexican Peso Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mexican Ventramex, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mexican Ventramex 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 Ventramex and the Mexican Peso Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Ventramex and the Mexican Peso Crisis case study
2. Improving business portfolio management of Mexican Ventramex
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 Mexican Ventramex
Strengths Ventramex and the Mexican Peso Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mexican Ventramex in Ventramex and the Mexican Peso Crisis Harvard Business Review case study are -
Ability to recruit top talent
– Mexican Ventramex is one of the leading recruiters in the industry. Managers in the Ventramex and the Mexican Peso Crisis are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Mexican Ventramex has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mexican Ventramex to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Mexican Ventramex has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Mexican Ventramex 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 Ventramex and the Mexican Peso Crisis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Mexican Ventramex 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 John Kamauff, Michiel R. Leenders, David L. Ager, Daniel D. Campbell 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.
Organizational Resilience of Mexican Ventramex
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mexican Ventramex does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Mexican Ventramex 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 Mexican Ventramex is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ventramex and the Mexican Peso Crisis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Mexican Ventramex 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 Ventramex and the Mexican Peso Crisis - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Technology & Operations field
– Mexican Ventramex 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 Mexican Ventramex in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Mexican Ventramex is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Mexican Ventramex is one of the most innovative firm in sector. Manager in Ventramex and the Mexican Peso Crisis Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Technology & Operations industry
– Ventramex and the Mexican Peso Crisis firm has clearly differentiated products in the market place. This has enabled Mexican Ventramex to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Mexican Ventramex to invest into research and development (R&D) and innovation.
Weaknesses Ventramex and the Mexican Peso Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ventramex and the Mexican Peso Crisis are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ventramex and the Mexican Peso Crisis, in the dynamic environment Mexican Ventramex has struggled to respond to the nimble upstart competition. Mexican Ventramex has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mexican Ventramex is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ventramex and the Mexican Peso Crisis 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 Ventramex and the Mexican Peso Crisis 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 Mexican Ventramex has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Ventramex and the Mexican Peso Crisis 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 Mexican Ventramex 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Mexican Ventramex needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 Mexican Ventramex supply chain. Even after few cautionary changes mentioned in the HBR case study - Ventramex and the Mexican Peso Crisis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mexican Ventramex vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Ventramex and the Mexican Peso Crisis, 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.
Need for greater diversity
– Mexican Ventramex 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.
High bargaining power of channel partners
– Because of the regulatory requirements, John Kamauff, Michiel R. Leenders, David L. Ager, Daniel D. Campbell suggests that, Mexican Ventramex 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 cash cycle compare to competitors
Mexican Ventramex 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.
Low market penetration in new markets
– Outside its home market of Mexican Ventramex, firm in the HBR case study Ventramex and the Mexican Peso Crisis needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Ventramex and the Mexican Peso Crisis | 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 Ventramex and the Mexican Peso Crisis are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Mexican Ventramex 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.
Manufacturing automation
– Mexican Ventramex 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.
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. Mexican Ventramex 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. Mexican Ventramex 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.
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. Mexican Ventramex 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, Mexican Ventramex is facing challenges because of the dominance of functional experts in the organization. Ventramex and the Mexican Peso Crisis 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mexican Ventramex can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mexican Ventramex 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, Ventramex and the Mexican Peso Crisis, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Mexican Ventramex 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 Mexican Ventramex has opened avenues for new revenue streams for the organization in the industry. This can help Mexican Ventramex to build a more holistic ecosystem as suggested in the Ventramex and the Mexican Peso Crisis case study. Mexican Ventramex can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Mexican Ventramex to increase its market reach. Mexican Ventramex 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 Mexican Ventramex 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mexican Ventramex can use these opportunities to build new business models that can help the communities that Mexican Ventramex operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Buying journey improvements
– Mexican Ventramex can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ventramex and the Mexican Peso Crisis 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.
Threats Ventramex and the Mexican Peso Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ventramex and the Mexican Peso Crisis are -
Environmental challenges
– Mexican Ventramex 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. Mexican Ventramex can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mexican Ventramex 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.
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.
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 Mexican Ventramex.
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 Mexican Ventramex business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Mexican Ventramex has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Mexican Ventramex 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.
Consumer confidence and its impact on Mexican Ventramex 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.
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. Mexican Ventramex needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Mexican Ventramex is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Mexican Ventramex can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ventramex and the Mexican Peso Crisis, Mexican Ventramex 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 .
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 Mexican Ventramex 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. Mexican Ventramex 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.
Weighted SWOT Analysis of Ventramex and the Mexican Peso Crisis 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 Ventramex and the Mexican Peso Crisis 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 Ventramex and the Mexican Peso Crisis 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 Ventramex and the Mexican Peso Crisis 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 Ventramex and the Mexican Peso Crisis 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 Mexican Ventramex needs to make to build a sustainable competitive advantage.