Mazda Motor Corporation: Surviving by Partnering with the Giants SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Mazda Motor Corporation: Surviving by Partnering with the Giants
For 30 years, Mazda Motor Corporation (Mazda) partnered with Ford Motor Company (Ford), helping Ford in small-car engineering and lean manufacturing in exchange for finance and marketing know-how; however, this alliance was terminated due to the global financial crisis in 2008. In 2015, Mazda entered into another long-term partnership to share technologies and cope with cost pressures-this time with Toyota Motor Corporation (Toyota). According to its 2016 Structural Reform Plan, Mazda aimed to achieve a global sales volume of 1.65 million units, an operating income ratio of at least 7 per cent, an equity ratio of at least 45 per cent, and a dividend payout ratio of at least 20 per cent by 2019. Given the highly competitive domestic and global automotive markets, to what extent could the partnership with Toyota and the Structural Reform Plan allow Mazda to achieve these goals? Would Mazda need to make any changes to its competitive strategies to keep the company driving forward? Wiboon Kittilaksanawong is affiliated with Saitama University. The authors Tae Kyung Lee and Andrew Jiro Poplawski are affiliated with Nagoya University of Commerce & Business.
Authors :: Wiboon Kittilaksanawong, Tae Kyung Lee, Andrew Jiro Poplawski
Swot Analysis of "Mazda Motor Corporation: Surviving by Partnering with the Giants" written by Wiboon Kittilaksanawong, Tae Kyung Lee, Andrew Jiro Poplawski includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mazda Motor facing as an external strategic factors. Some of the topics covered in Mazda Motor Corporation: Surviving by Partnering with the Giants case study are - Strategic Management Strategies, Financial markets, Innovation, Joint ventures, Managing people, Reorganization and Global Business.
Some of the macro environment factors that can be used to understand the Mazda Motor Corporation: Surviving by Partnering with the Giants casestudy better are - – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, there is backlash against globalization, central banks are concerned over increasing inflation, increasing transportation and logistics costs, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Mazda Motor Corporation: Surviving by Partnering with the Giants
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mazda Motor Corporation: Surviving by Partnering with the Giants case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mazda Motor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mazda Motor 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 Mazda Motor Corporation: Surviving by Partnering with the Giants can be done for the following purposes –
1. Strategic planning using facts provided in Mazda Motor Corporation: Surviving by Partnering with the Giants case study
2. Improving business portfolio management of Mazda Motor
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mazda Motor
Strengths Mazda Motor Corporation: Surviving by Partnering with the Giants | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mazda Motor in Mazda Motor Corporation: Surviving by Partnering with the Giants Harvard Business Review case study are -
Strong track record of project management
– Mazda Motor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Mazda Motor 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 Mazda Motor Corporation: Surviving by Partnering with the Giants - 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 Global Business industry
– Mazda Motor Corporation: Surviving by Partnering with the Giants firm has clearly differentiated products in the market place. This has enabled Mazda Motor to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Mazda Motor to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Mazda Motor 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.
Superior customer experience
– The customer experience strategy of Mazda Motor 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
– Mazda Motor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mazda Motor 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Mazda Motor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mazda Motor 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.
Innovation driven organization
– Mazda Motor is one of the most innovative firm in sector. Manager in Mazda Motor Corporation: Surviving by Partnering with the Giants Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Mazda Motor Corporation: Surviving by Partnering with the Giants 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 Mazda Motor
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mazda Motor does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Mazda Motor has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mazda Motor Corporation: Surviving by Partnering with the Giants 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.
Analytics focus
– Mazda Motor is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Wiboon Kittilaksanawong, Tae Kyung Lee, Andrew Jiro Poplawski can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Mazda Motor Corporation: Surviving by Partnering with the Giants | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mazda Motor Corporation: Surviving by Partnering with the Giants are -
Increasing silos among functional specialists
– The organizational structure of Mazda Motor is dominated by functional specialists. It is not different from other players in the Global Business segment. Mazda Motor needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mazda Motor to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Mazda Motor, firm in the HBR case study Mazda Motor Corporation: Surviving by Partnering with the Giants needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Mazda Motor supply chain. Even after few cautionary changes mentioned in the HBR case study - Mazda Motor Corporation: Surviving by Partnering with the Giants, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mazda Motor vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Mazda Motor Corporation: Surviving by Partnering with the Giants, it seems that company is thinking about the frontier risks that can impact Global Business 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, Mazda Motor is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mazda Motor Corporation: Surviving by Partnering with the Giants can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Mazda Motor Corporation: Surviving by Partnering with the Giants, it seems that the employees of Mazda Motor 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Mazda Motor Corporation: Surviving by Partnering with the Giants, is just above the industry average. Mazda Motor 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.
Need for greater diversity
– Mazda Motor 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.
Interest costs
– Compare to the competition, Mazda Motor 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.
Slow decision making process
– As mentioned earlier in the report, Mazda Motor 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. Mazda Motor 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 cash cycle compare to competitors
Mazda Motor 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.
Opportunities Mazda Motor Corporation: Surviving by Partnering with the Giants | 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 Mazda Motor Corporation: Surviving by Partnering with the Giants are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mazda Motor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Mazda Motor 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 Mazda Motor 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.
Using analytics as competitive advantage
– Mazda Motor 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 Mazda Motor Corporation: Surviving by Partnering with the Giants - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mazda Motor to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mazda Motor 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 Mazda Motor to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mazda Motor 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, Mazda Motor Corporation: Surviving by Partnering with the Giants, 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, Mazda Motor 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mazda Motor 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. Mazda Motor 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.
Loyalty marketing
– Mazda Motor 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.
Leveraging digital technologies
– Mazda Motor 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Mazda Motor can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Mazda Motor can develop new processes and procedures in Global Business 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.
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 Mazda Motor in the consumer business. Now Mazda Motor can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Mazda Motor Corporation: Surviving by Partnering with the Giants External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mazda Motor Corporation: Surviving by Partnering with the Giants are -
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. Mazda Motor needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mazda Motor in the Global Business industry. The Global Business 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
– Mazda Motor 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 Mazda Motor Corporation: Surviving by Partnering with the Giants, Mazda Motor may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Mazda Motor.
Environmental challenges
– Mazda Motor 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. Mazda Motor can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Stagnating economy with rate increase
– Mazda Motor 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mazda Motor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Mazda Motor has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Mazda Motor needs to keep up with the evolution of technology in the Global Business 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mazda Motor 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 Mazda Motor Corporation: Surviving by Partnering with the Giants .
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mazda Motor can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Mazda Motor
– 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 Mazda Motor.
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 Mazda Motor business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Mazda Motor Corporation: Surviving by Partnering with the Giants 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 Mazda Motor Corporation: Surviving by Partnering with the Giants 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 Mazda Motor Corporation: Surviving by Partnering with the Giants 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 Mazda Motor Corporation: Surviving by Partnering with the Giants 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 Mazda Motor Corporation: Surviving by Partnering with the Giants 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 Mazda Motor needs to make to build a sustainable competitive advantage.
