Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH
With increasing pollution and congestion, European car manufacturers were concerned that governments might eventually ban conventional cars from city centers. A smaller car had the possibility of escaping such a ban. The producer of Swatch watches, SMH AG (Swiss Corp. for Microelectronics and Watchmaking Industries, Ltd.), came up with the novel idea of an environmentally friendly but stylish supercompact car. The smarta would embody a whole new notion of mobility, where owning a smart car would mean purchasing an uninterrupted mobility solution, referred to as smartmove. The program would offer the smart customer attractive, favorably priced parking spaces, access to other vehicles from AVIS and car-sharers, access to other means of transport, and reduced prices for transporting the smart on ferries and trains.
Swot Analysis of "Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH" written by Hau Lee, Ozlem Yuksel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Smart Car facing as an external strategic factors. Some of the topics covered in Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH case study are - Strategic Management Strategies, Manufacturing, Supply chain, Sustainability and Technology & Operations.
Some of the macro environment factors that can be used to understand the Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH casestudy better are - – supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, there is backlash against globalization, technology disruption, increasing commodity prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Smart Car, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Smart Car 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH can be done for the following purposes –
1. Strategic planning using facts provided in Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH case study
2. Improving business portfolio management of Smart Car
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 Smart Car
Strengths Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Smart Car in Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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.
Ability to lead change in Technology & Operations field
– Smart Car 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 Smart Car in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Smart Car digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Smart Car 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.
Low bargaining power of suppliers
– Suppliers of Smart Car in the sector have low bargaining power. Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Smart Car to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Smart Car 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 Smart Car is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Smart Car 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.
High brand equity
– Smart Car has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Smart Car to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Technology & Operations industry
– Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH firm has clearly differentiated products in the market place. This has enabled Smart Car to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Smart Car to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Smart Car in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Smart Car has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Smart Car 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.
Highly skilled collaborators
– Smart Car 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Smart Car is present in almost all the verticals within the industry. This has provided firm in Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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.
Weaknesses Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH are -
Aligning sales with marketing
– It come across in the case study Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH can leverage the sales team experience to cultivate customer relationships as Smart Car is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Smart Car 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.
Increasing silos among functional specialists
– The organizational structure of Smart Car is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Smart Car needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Smart Car to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Smart Car has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH, it seems that the employees of Smart Car don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH HBR case study mentions - Smart Car 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.
Lack of clear differentiation of Smart Car products
– To increase the profitability and margins on the products, Smart Car needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Smart Car 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 - Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Smart Car 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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 Smart Car 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH, in the dynamic environment Smart Car has struggled to respond to the nimble upstart competition. Smart Car has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH | 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Smart Car 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.
Using analytics as competitive advantage
– Smart Car 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Smart Car to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Smart Car can use these opportunities to build new business models that can help the communities that Smart Car operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Smart Car is facing challenges because of the dominance of functional experts in the organization. Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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.
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. Smart Car can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Smart Car in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Smart Car to increase its market reach. Smart Car 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.
Loyalty marketing
– Smart Car 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Smart Car 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, Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Smart Car 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.
Leveraging digital technologies
– Smart Car 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.
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 Smart Car 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Smart Car 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 Smart Car to hire the very best people irrespective of their geographical location.
Threats Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH are -
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 Smart Car.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH, Smart Car 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Smart Car with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Smart Car needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Smart Car 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.
Increasing wage structure of Smart Car
– 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 Smart Car.
High dependence on third party suppliers
– Smart Car 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.
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 Smart Car business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Smart Car 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH .
Stagnating economy with rate increase
– Smart Car 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.
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. Smart Car 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.
Consumer confidence and its impact on Smart Car 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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 Smart Supply Chain for a Smart Product: Micro Compact Car Smart GmbH 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 Smart Car needs to make to build a sustainable competitive advantage.
