Aston Martin: The Crossover Conundrum SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Aston Martin: The Crossover Conundrum
In March 2009, Ulrich Bez, CEO of British carmaker Aston Martin Lagonda Ltd., found himself grappling with some tough news from Switzerland. The company had just debuted a novel car concept, its first crossover model under its rarely used historic Lagonda brand, at the Geneva Motor Show, but the negative press criticizing the four-wheel drive, four-seater car's design and concept was troubling and unexpected.
Authors :: L. J. Bourgeois III, Yiorgos Allayannis, Luca Cian, Morela Hernandez
Swot Analysis of "Aston Martin: The Crossover Conundrum" written by L. J. Bourgeois III, Yiorgos Allayannis, Luca Cian, Morela Hernandez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lagonda Aston facing as an external strategic factors. Some of the topics covered in Aston Martin: The Crossover Conundrum case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Aston Martin: The Crossover Conundrum casestudy better are - – increasing commodity prices, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, technology disruption,
increasing household debt because of falling income levels, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Aston Martin: The Crossover Conundrum
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aston Martin: The Crossover Conundrum case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lagonda Aston, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lagonda Aston 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 Aston Martin: The Crossover Conundrum can be done for the following purposes –
1. Strategic planning using facts provided in Aston Martin: The Crossover Conundrum case study
2. Improving business portfolio management of Lagonda Aston
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lagonda Aston
Strengths Aston Martin: The Crossover Conundrum | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lagonda Aston in Aston Martin: The Crossover Conundrum Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Aston Martin: The Crossover Conundrum 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 Strategy & Execution field
– Lagonda Aston 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 Lagonda Aston in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Lagonda Aston digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lagonda Aston 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.
Superior customer experience
– The customer experience strategy of Lagonda Aston 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
– Lagonda Aston has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lagonda Aston 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.
Innovation driven organization
– Lagonda Aston is one of the most innovative firm in sector. Manager in Aston Martin: The Crossover Conundrum Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Lagonda Aston is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Lagonda Aston
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lagonda Aston does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Lagonda Aston 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 Aston Martin: The Crossover Conundrum HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Lagonda Aston 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 L. J. Bourgeois III, Yiorgos Allayannis, Luca Cian, Morela Hernandez 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Aston Martin: The Crossover Conundrum firm has clearly differentiated products in the market place. This has enabled Lagonda Aston to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Lagonda Aston to invest into research and development (R&D) and innovation.
Training and development
– Lagonda Aston has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Aston Martin: The Crossover Conundrum 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.
Weaknesses Aston Martin: The Crossover Conundrum | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aston Martin: The Crossover Conundrum are -
Increasing silos among functional specialists
– The organizational structure of Lagonda Aston is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Lagonda Aston needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lagonda Aston to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Lagonda Aston 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Aston Martin: The Crossover Conundrum, is just above the industry average. Lagonda Aston 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.
Skills based hiring
– The stress on hiring functional specialists at Lagonda Aston 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.
Slow to strategic competitive environment developments
– As Aston Martin: The Crossover Conundrum HBR case study mentions - Lagonda Aston 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 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 Lagonda Aston supply chain. Even after few cautionary changes mentioned in the HBR case study - Aston Martin: The Crossover Conundrum, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lagonda Aston vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Lagonda Aston 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 - Aston Martin: The Crossover Conundrum should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Lagonda Aston 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. Lagonda Aston 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, L. J. Bourgeois III, Yiorgos Allayannis, Luca Cian, Morela Hernandez suggests that, Lagonda Aston 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Aston Martin: The Crossover Conundrum, it seems that the employees of Lagonda Aston 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Aston Martin: The Crossover Conundrum has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lagonda Aston 's lucrative customers.
Opportunities Aston Martin: The Crossover Conundrum | 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 Aston Martin: The Crossover Conundrum are -
Creating value in data economy
– The success of analytics program of Lagonda Aston has opened avenues for new revenue streams for the organization in the industry. This can help Lagonda Aston to build a more holistic ecosystem as suggested in the Aston Martin: The Crossover Conundrum case study. Lagonda Aston can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Lagonda Aston can develop new processes and procedures in Strategy & Execution 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lagonda Aston 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. Lagonda Aston 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lagonda Aston in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Lagonda Aston can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Lagonda Aston to increase its market reach. Lagonda Aston 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.
Buying journey improvements
– Lagonda Aston can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aston Martin: The Crossover Conundrum suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Lagonda Aston 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lagonda Aston 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lagonda Aston can use these opportunities to build new business models that can help the communities that Lagonda Aston operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Lagonda Aston can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Lagonda Aston in the consumer business. Now Lagonda Aston can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Lagonda Aston 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 Strategy & Execution segment.
Threats Aston Martin: The Crossover Conundrum External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aston Martin: The Crossover Conundrum are -
Shortening product life cycle
– it is one of the major threat that Lagonda Aston is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Lagonda Aston 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.
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. Lagonda Aston needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lagonda Aston 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 Aston Martin: The Crossover Conundrum .
Consumer confidence and its impact on Lagonda Aston 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.
Technology acceleration in Forth Industrial Revolution
– Lagonda Aston has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Lagonda Aston needs to keep up with the evolution of technology in the Strategy & Execution 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.
Regulatory challenges
– Lagonda Aston 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 Strategy & Execution industry regulations.
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 Lagonda Aston in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Lagonda Aston
– 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 Lagonda Aston.
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. Lagonda Aston 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.
Environmental challenges
– Lagonda Aston 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. Lagonda Aston can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Aston Martin: The Crossover Conundrum, Lagonda Aston may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Aston Martin: The Crossover Conundrum 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 Aston Martin: The Crossover Conundrum 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 Aston Martin: The Crossover Conundrum 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 Aston Martin: The Crossover Conundrum 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 Aston Martin: The Crossover Conundrum 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 Lagonda Aston needs to make to build a sustainable competitive advantage.
