Ford Argentina: Transforming a Global Industry in a Local Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ford Argentina: Transforming a Global Industry in a Local Market
The president of Ford Argentina has to decide on the e-business approach at this subsidiary of Ford Motor Co. The approach must take into consideration the ambitious global e-business transformation proposed by the parent company within the context of a major economic crisis suffered in Argentina.
Authors :: Lynda M. Applegate, Paula Etchard, Laureano Berasategui, Ramiro Montealegre
Swot Analysis of "Ford Argentina: Transforming a Global Industry in a Local Market" written by Lynda M. Applegate, Paula Etchard, Laureano Berasategui, Ramiro Montealegre includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ford Argentina facing as an external strategic factors. Some of the topics covered in Ford Argentina: Transforming a Global Industry in a Local Market case study are - Strategic Management Strategies, Entrepreneurship, Internet, Joint ventures, Leadership, Organizational culture and Technology & Operations.
Some of the macro environment factors that can be used to understand the Ford Argentina: Transforming a Global Industry in a Local Market casestudy better are - – increasing energy prices, technology disruption, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Ford Argentina: Transforming a Global Industry in a Local Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ford Argentina: Transforming a Global Industry in a Local Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ford Argentina, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ford Argentina 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 Ford Argentina: Transforming a Global Industry in a Local Market can be done for the following purposes –
1. Strategic planning using facts provided in Ford Argentina: Transforming a Global Industry in a Local Market case study
2. Improving business portfolio management of Ford Argentina
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 Ford Argentina
Strengths Ford Argentina: Transforming a Global Industry in a Local Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ford Argentina in Ford Argentina: Transforming a Global Industry in a Local Market Harvard Business Review case study are -
Diverse revenue streams
– Ford Argentina is present in almost all the verticals within the industry. This has provided firm in Ford Argentina: Transforming a Global Industry in a Local Market 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Ford Argentina digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ford Argentina 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.
Effective Research and Development (R&D)
– Ford Argentina 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 Ford Argentina: Transforming a Global Industry in a Local Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Technology & Operations industry
– Ford Argentina: Transforming a Global Industry in a Local Market firm has clearly differentiated products in the market place. This has enabled Ford Argentina to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Ford Argentina to invest into research and development (R&D) and innovation.
Training and development
– Ford Argentina has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ford Argentina: Transforming a Global Industry in a Local Market Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Ford Argentina in the sector have low bargaining power. Ford Argentina: Transforming a Global Industry in a Local Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ford Argentina to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Ford Argentina are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Ford Argentina is one of the most innovative firm in sector. Manager in Ford Argentina: Transforming a Global Industry in a Local Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Ford Argentina 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 Ford Argentina: Transforming a Global Industry in a Local Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Ford Argentina
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ford Argentina does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Ford Argentina: Transforming a Global Industry in a Local Market 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
– Ford Argentina 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 Ford Argentina in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Ford Argentina: Transforming a Global Industry in a Local Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ford Argentina: Transforming a Global Industry in a Local Market are -
Products dominated business model
– Even though Ford Argentina 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 - Ford Argentina: Transforming a Global Industry in a Local Market should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ford Argentina: Transforming a Global Industry in a Local Market, is just above the industry average. Ford Argentina 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ford Argentina is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ford Argentina: Transforming a Global Industry in a Local Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Ford Argentina: Transforming a Global Industry in a Local Market HBR case study mentions - Ford Argentina 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynda M. Applegate, Paula Etchard, Laureano Berasategui, Ramiro Montealegre suggests that, Ford Argentina 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.
Lack of clear differentiation of Ford Argentina products
– To increase the profitability and margins on the products, Ford Argentina needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Ford Argentina 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ford Argentina: Transforming a Global Industry in a Local Market 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 Ford Argentina has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Ford Argentina 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.
High cash cycle compare to competitors
Ford Argentina 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.
Slow decision making process
– As mentioned earlier in the report, Ford Argentina 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. Ford Argentina 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.
Opportunities Ford Argentina: Transforming a Global Industry in a Local Market | 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 Ford Argentina: Transforming a Global Industry in a Local Market are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ford Argentina can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Ford Argentina 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ford Argentina is facing challenges because of the dominance of functional experts in the organization. Ford Argentina: Transforming a Global Industry in a Local Market 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ford Argentina 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, Ford Argentina: Transforming a Global Industry in a Local Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ford Argentina 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 Ford Argentina to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Ford Argentina 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.
Better consumer reach
– The expansion of the 5G network will help Ford Argentina to increase its market reach. Ford Argentina will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Ford Argentina 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.
Learning at scale
– Online learning technologies has now opened space for Ford Argentina 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.
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. Ford Argentina can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Ford Argentina 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.
Creating value in data economy
– The success of analytics program of Ford Argentina has opened avenues for new revenue streams for the organization in the industry. This can help Ford Argentina to build a more holistic ecosystem as suggested in the Ford Argentina: Transforming a Global Industry in a Local Market case study. Ford Argentina 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. Ford Argentina 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. Ford Argentina 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.
Threats Ford Argentina: Transforming a Global Industry in a Local Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ford Argentina: Transforming a Global Industry in a Local Market are -
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.
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. Ford Argentina can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Ford Argentina has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Ford Argentina 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.
High dependence on third party suppliers
– Ford Argentina 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ford Argentina: Transforming a Global Industry in a Local Market, Ford Argentina 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ford Argentina 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.
Stagnating economy with rate increase
– Ford Argentina 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.
Increasing wage structure of Ford Argentina
– 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 Ford Argentina.
Environmental challenges
– Ford Argentina 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. Ford Argentina 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 Ford Argentina with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ford Argentina 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 Ford Argentina: Transforming a Global Industry in a Local Market .
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. Ford Argentina needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Ford Argentina in the Technology & Operations sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Ford Argentina: Transforming a Global Industry in a Local Market 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 Ford Argentina: Transforming a Global Industry in a Local Market 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 Ford Argentina: Transforming a Global Industry in a Local Market 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 Ford Argentina: Transforming a Global Industry in a Local Market 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 Ford Argentina: Transforming a Global Industry in a Local Market 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 Ford Argentina needs to make to build a sustainable competitive advantage.