General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration
Rick Wagoner, CEO of General Motors (GM), knew that something was "broken" in the automobile industry long before a USA Today article announced it in December 2001. Wagoner, along with top lieutenants, had launched several initiatives to realize their shared vision of value creation within GM. Several of these initiatives were aimed at integrating GM's demand and supply chains, supported by the latest technologies. Their goal was to strengthen and integrate GM's demand and supply chain systems to build what is known as a digital loyalty network (DLN). As its name implies, a DLN includes the three components GM was addressing: "digital" for technology enabled; "loyalty" for a focus on customers and on increasing their loyalty and lifetime value to GM; and "network" for coordinating and leveraging all supply and distribution chain partners to serve those customers. Wagoner and his team believed their efforts would be fundamental to a sustainable, value-creating auto industry business model that would lead to increased efficiency and profitability. The group had made excellent progress, and Wagoner decided to get together with his team to take stock of where they stood in realizing their overall vision. But the words "industry business model is broken" stayed with him. He wondered whether the investments in these myriad initiatives would actually pay off--and whether they would help fix the problem of low value creation.
Authors :: Hau Lee, Peter Koudal, Barchi Peleg, Paresh Rajwat
Swot Analysis of "General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration" written by Hau Lee, Peter Koudal, Barchi Peleg, Paresh Rajwat includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wagoner Gm facing as an external strategic factors. Some of the topics covered in General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration case study are - Strategic Management Strategies, Networking, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration casestudy better are - – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, geopolitical disruptions,
cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wagoner Gm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wagoner 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 General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration can be done for the following purposes –
1. Strategic planning using facts provided in General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration case study
2. Improving business portfolio management of Wagoner 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 Wagoner Gm
Strengths General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wagoner Gm in General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration firm has clearly differentiated products in the market place. This has enabled Wagoner Gm to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Wagoner Gm to invest into research and development (R&D) and innovation.
Training and development
– Wagoner Gm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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.
Ability to lead change in Technology & Operations field
– Wagoner 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 Wagoner Gm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Wagoner Gm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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.
Organizational Resilience of Wagoner Gm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wagoner Gm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Wagoner 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 General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Wagoner Gm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wagoner Gm 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.
Ability to recruit top talent
– Wagoner Gm is one of the leading recruiters in the industry. Managers in the General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Wagoner 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 Wagoner Gm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Wagoner Gm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wagoner 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.
Cross disciplinary teams
– Horizontal connected teams at the Wagoner Gm 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.
Weaknesses General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration are -
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 Wagoner Gm supply chain. Even after few cautionary changes mentioned in the HBR case study - General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wagoner Gm vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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 General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration can leverage the sales team experience to cultivate customer relationships as Wagoner Gm is planning to shift buying processes online.
Lack of clear differentiation of Wagoner Gm products
– To increase the profitability and margins on the products, Wagoner Gm needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration, it seems that the employees of Wagoner Gm 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.
Need for greater diversity
– Wagoner Gm 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration, is just above the industry average. Wagoner 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.
Slow decision making process
– As mentioned earlier in the report, Wagoner 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. Wagoner 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration, in the dynamic environment Wagoner Gm has struggled to respond to the nimble upstart competition. Wagoner Gm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Wagoner 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.
High cash cycle compare to competitors
Wagoner 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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 Wagoner Gm has relatively successful track record of launching new products.
Opportunities General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration | 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 General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration are -
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. Wagoner Gm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Wagoner 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. Wagoner 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.
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. Wagoner Gm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Wagoner Gm 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, Wagoner 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, General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Wagoner 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.
Building a culture of innovation
– managers at Wagoner 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wagoner Gm 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.
Using analytics as competitive advantage
– Wagoner 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 General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wagoner Gm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Wagoner 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.
Better consumer reach
– The expansion of the 5G network will help Wagoner Gm to increase its market reach. Wagoner 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wagoner Gm is facing challenges because of the dominance of functional experts in the organization. General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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.
Creating value in data economy
– The success of analytics program of Wagoner Gm has opened avenues for new revenue streams for the organization in the industry. This can help Wagoner Gm to build a more holistic ecosystem as suggested in the General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration case study. Wagoner Gm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration are -
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. Wagoner Gm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Wagoner 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. Wagoner Gm can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Wagoner Gm
– 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 Wagoner Gm.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wagoner 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.
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 Wagoner Gm in the Technology & Operations sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Wagoner Gm has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Wagoner 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.
High dependence on third party suppliers
– Wagoner 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wagoner Gm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Wagoner 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.
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.
Stagnating economy with rate increase
– Wagoner 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.
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 Wagoner Gm.
Weighted SWOT Analysis of General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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 General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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 General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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 General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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 General Motors: Building a Digital Loyalty Network Through Demand and Supply Chain Integration 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 Wagoner Gm needs to make to build a sustainable competitive advantage.
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