Disruption in the Automotive Industry: A Cambrian Moment SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Disruption in the Automotive Industry: A Cambrian Moment
The automotive industry is experiencing a moment of innovation. With electronics gaining importance, the need to find sustainable solutions and the rampant availability of sharing platforms, the dynamics of this sector is witnessing a paradigm shift. A host of startups is colonizing every niche of what seems to be the new architecture: shared and self-driven electric vehicles. Old incumbents and emerging startups are interacting to control key technologies and the user interfaces of the future. The mechanical machine is being converted into a computer. The connected car is creating a new ecosystem for entrepreneurial opportunities. This study analyzes a set of 156 venture-backed startups: the nature of the firms, their founders' profiles, their origins, their technological capabilities, and their investors. Our findings and conclusions are: (1) a phase of instability and vibrancy is beginning wherein multiple emerging firms compete to impose their standards, (2) the competitive battle is conducted in the digital arena, (3) disruption is led by outsiders with entrepreneurial experience and deep knowledge of digital technologies, and (4) a final winning dominant design may emerge. Entrepreneurial outsiders and outsiders coming from consumer electronics, electrical companies, and/or digital platforms have a window of opportunity to enter this new market.
Swot Analysis of "Disruption in the Automotive Industry: A Cambrian Moment" written by Xavier Ferras-Hernandez, Elisenda Tarrats-Pons, Nuria Arimany-Serrat includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Outsiders Startups facing as an external strategic factors. Some of the topics covered in Disruption in the Automotive Industry: A Cambrian Moment case study are - Strategic Management Strategies, International business and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Disruption in the Automotive Industry: A Cambrian Moment casestudy better are - – technology disruption, increasing household debt because of falling income levels, geopolitical disruptions, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
central banks are concerned over increasing inflation, wage bills are increasing, etc
Introduction to SWOT Analysis of Disruption in the Automotive Industry: A Cambrian Moment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Disruption in the Automotive Industry: A Cambrian Moment case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Outsiders Startups, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Outsiders Startups 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 Disruption in the Automotive Industry: A Cambrian Moment can be done for the following purposes –
1. Strategic planning using facts provided in Disruption in the Automotive Industry: A Cambrian Moment case study
2. Improving business portfolio management of Outsiders Startups
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Outsiders Startups
Strengths Disruption in the Automotive Industry: A Cambrian Moment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Outsiders Startups in Disruption in the Automotive Industry: A Cambrian Moment Harvard Business Review case study are -
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Outsiders Startups digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Outsiders Startups 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.
Highly skilled collaborators
– Outsiders Startups 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 Disruption in the Automotive Industry: A Cambrian Moment HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Outsiders Startups 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.
Learning organization
- Outsiders Startups 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 Outsiders Startups is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Disruption in the Automotive Industry: A Cambrian Moment Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Outsiders Startups 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 Outsiders Startups in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Outsiders Startups has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Outsiders Startups to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Outsiders Startups is one of the leading recruiters in the industry. Managers in the Disruption in the Automotive Industry: A Cambrian Moment are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Outsiders Startups is present in almost all the verticals within the industry. This has provided firm in Disruption in the Automotive Industry: A Cambrian Moment 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.
Successful track record of launching new products
– Outsiders Startups has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Outsiders Startups 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.
Operational resilience
– The operational resilience strategy in the Disruption in the Automotive Industry: A Cambrian Moment 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.
Low bargaining power of suppliers
– Suppliers of Outsiders Startups in the sector have low bargaining power. Disruption in the Automotive Industry: A Cambrian Moment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Outsiders Startups to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Outsiders Startups
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Outsiders Startups does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Disruption in the Automotive Industry: A Cambrian Moment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Disruption in the Automotive Industry: A Cambrian Moment are -
Slow decision making process
– As mentioned earlier in the report, Outsiders Startups 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. Outsiders Startups 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Xavier Ferras-Hernandez, Elisenda Tarrats-Pons, Nuria Arimany-Serrat suggests that, Outsiders Startups 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Disruption in the Automotive Industry: A Cambrian Moment 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 Outsiders Startups has relatively successful track record of launching new products.
High cash cycle compare to competitors
Outsiders Startups 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Disruption in the Automotive Industry: A Cambrian Moment, in the dynamic environment Outsiders Startups has struggled to respond to the nimble upstart competition. Outsiders Startups has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Outsiders Startups 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 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 Outsiders Startups supply chain. Even after few cautionary changes mentioned in the HBR case study - Disruption in the Automotive Industry: A Cambrian Moment, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Outsiders Startups vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Outsiders Startups, firm in the HBR case study Disruption in the Automotive Industry: A Cambrian Moment needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Disruption in the Automotive Industry: A Cambrian Moment, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Outsiders Startups is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Disruption in the Automotive Industry: A Cambrian Moment can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Outsiders Startups 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 - Disruption in the Automotive Industry: A Cambrian Moment should strive to include more intangible value offerings along with its core products and services.
Opportunities Disruption in the Automotive Industry: A Cambrian Moment | 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 Disruption in the Automotive Industry: A Cambrian Moment are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Outsiders Startups 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, Disruption in the Automotive Industry: A Cambrian Moment, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Outsiders Startups can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Outsiders Startups in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Outsiders Startups 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. Outsiders Startups 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.
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 Outsiders Startups 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.
Better consumer reach
– The expansion of the 5G network will help Outsiders Startups to increase its market reach. Outsiders Startups 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
– Outsiders Startups 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.
Developing new processes and practices
– Outsiders Startups can develop new processes and procedures in Leadership & Managing People 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.
Leveraging digital technologies
– Outsiders Startups 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Outsiders Startups in the consumer business. Now Outsiders Startups can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Outsiders Startups 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 Leadership & Managing People segment.
Creating value in data economy
– The success of analytics program of Outsiders Startups has opened avenues for new revenue streams for the organization in the industry. This can help Outsiders Startups to build a more holistic ecosystem as suggested in the Disruption in the Automotive Industry: A Cambrian Moment case study. Outsiders Startups can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Outsiders Startups is facing challenges because of the dominance of functional experts in the organization. Disruption in the Automotive Industry: A Cambrian Moment 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.
Threats Disruption in the Automotive Industry: A Cambrian Moment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Disruption in the Automotive Industry: A Cambrian Moment are -
Shortening product life cycle
– it is one of the major threat that Outsiders Startups is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Outsiders Startups
– 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 Outsiders Startups.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Outsiders Startups 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 Disruption in the Automotive Industry: A Cambrian Moment .
Consumer confidence and its impact on Outsiders Startups 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Outsiders Startups can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Outsiders Startups 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 Outsiders Startups.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Outsiders Startups in the Leadership & Managing People industry. The Leadership & Managing People 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.
High dependence on third party suppliers
– Outsiders Startups 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.
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.
Regulatory challenges
– Outsiders Startups needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Disruption in the Automotive Industry: A Cambrian Moment, Outsiders Startups may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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.
Weighted SWOT Analysis of Disruption in the Automotive Industry: A Cambrian Moment 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 Disruption in the Automotive Industry: A Cambrian Moment 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 Disruption in the Automotive Industry: A Cambrian Moment 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 Disruption in the Automotive Industry: A Cambrian Moment 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 Disruption in the Automotive Industry: A Cambrian Moment 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 Outsiders Startups needs to make to build a sustainable competitive advantage.
