Volkswagen's Emissions Scandal: How Could It Happen? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Volkswagen's Emissions Scandal: How Could It Happen?
The case is a detailed 'inside' account of the 'dieselgate' scandal at Volkswagen which revealed how engineers had programmed software that enabled its card to cheat emissions tests. It explores the origins of internal and external forces that propelled the company to market environmentally sustainable "clean diesel" cars while using engine management software to conceal on-the-road emissions of over 40 times the permitted levels. The scandal - one of the biggest of the decade - illustrates contributing factors that are common to many instances of organizational misconduct: obedience to authority, organizational culture, goal-setting, and corporate governance.
Authors :: N. Craig Smith, Erin McCormick
Topics :: Leadership & Managing People
Tags :: Ethics, International business, Leadership, Marketing, Social responsibility, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Volkswagen's Emissions Scandal: How Could It Happen?" written by N. Craig Smith, Erin McCormick includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Emissions Scandal facing as an external strategic factors. Some of the topics covered in Volkswagen's Emissions Scandal: How Could It Happen? case study are - Strategic Management Strategies, Ethics, International business, Leadership, Marketing, Social responsibility, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Volkswagen's Emissions Scandal: How Could It Happen? casestudy better are - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing energy prices, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Volkswagen's Emissions Scandal: How Could It Happen?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Volkswagen's Emissions Scandal: How Could It Happen? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Emissions Scandal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Emissions Scandal 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 Volkswagen's Emissions Scandal: How Could It Happen? can be done for the following purposes –
1. Strategic planning using facts provided in Volkswagen's Emissions Scandal: How Could It Happen? case study
2. Improving business portfolio management of Emissions Scandal
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 Emissions Scandal
Strengths Volkswagen's Emissions Scandal: How Could It Happen? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Emissions Scandal in Volkswagen's Emissions Scandal: How Could It Happen? Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Emissions Scandal 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 Volkswagen's Emissions Scandal: How Could It Happen? 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.
High brand equity
– Emissions Scandal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Emissions Scandal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Emissions Scandal in the sector have low bargaining power. Volkswagen's Emissions Scandal: How Could It Happen? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Emissions Scandal to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Emissions Scandal is one of the most innovative firm in sector. Manager in Volkswagen's Emissions Scandal: How Could It Happen? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Emissions Scandal is one of the leading recruiters in the industry. Managers in the Volkswagen's Emissions Scandal: How Could It Happen? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Emissions Scandal 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.
Strong track record of project management
– Emissions Scandal is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Emissions Scandal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Emissions Scandal 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.
Highly skilled collaborators
– Emissions Scandal 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 Volkswagen's Emissions Scandal: How Could It Happen? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Leadership & Managing People field
– Emissions Scandal 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 Emissions Scandal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Emissions Scandal is present in almost all the verticals within the industry. This has provided firm in Volkswagen's Emissions Scandal: How Could It Happen? 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.
Weaknesses Volkswagen's Emissions Scandal: How Could It Happen? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Volkswagen's Emissions Scandal: How Could It Happen? are -
Interest costs
– Compare to the competition, Emissions Scandal 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Emissions Scandal needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Volkswagen's Emissions Scandal: How Could It Happen? HBR case study mentions - Emissions Scandal 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Emissions Scandal is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Volkswagen's Emissions Scandal: How Could It Happen? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Volkswagen's Emissions Scandal: How Could It Happen? 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 Emissions Scandal has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Volkswagen's Emissions Scandal: How Could It Happen?, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Volkswagen's Emissions Scandal: How Could It Happen?, in the dynamic environment Emissions Scandal has struggled to respond to the nimble upstart competition. Emissions Scandal has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Volkswagen's Emissions Scandal: How Could It Happen?, it seems that the employees of Emissions Scandal 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.
Aligning sales with marketing
– It come across in the case study Volkswagen's Emissions Scandal: How Could It Happen? 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 Volkswagen's Emissions Scandal: How Could It Happen? can leverage the sales team experience to cultivate customer relationships as Emissions Scandal is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Emissions Scandal 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. Emissions Scandal 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, N. Craig Smith, Erin McCormick suggests that, Emissions Scandal 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.
Opportunities Volkswagen's Emissions Scandal: How Could It Happen? | 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 Volkswagen's Emissions Scandal: How Could It Happen? are -
Building a culture of innovation
– managers at Emissions Scandal 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.
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. Emissions Scandal 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. Emissions Scandal 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Emissions Scandal 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, Volkswagen's Emissions Scandal: How Could It Happen?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Emissions Scandal can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Emissions Scandal 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.
Using analytics as competitive advantage
– Emissions Scandal 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 Volkswagen's Emissions Scandal: How Could It Happen? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Emissions Scandal 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 Emissions Scandal 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 Emissions Scandal to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Emissions Scandal 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Emissions Scandal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Emissions Scandal has opened avenues for new revenue streams for the organization in the industry. This can help Emissions Scandal to build a more holistic ecosystem as suggested in the Volkswagen's Emissions Scandal: How Could It Happen? case study. Emissions Scandal can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Emissions Scandal to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Better consumer reach
– The expansion of the 5G network will help Emissions Scandal to increase its market reach. Emissions Scandal 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Emissions Scandal can use these opportunities to build new business models that can help the communities that Emissions Scandal operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Volkswagen's Emissions Scandal: How Could It Happen? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Volkswagen's Emissions Scandal: How Could It Happen? are -
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.
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. Emissions Scandal 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Emissions Scandal 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.
Stagnating economy with rate increase
– Emissions Scandal 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.
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 Emissions Scandal business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Emissions Scandal 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.
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 Emissions Scandal.
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. Emissions Scandal needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Emissions Scandal 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. Emissions Scandal can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Emissions Scandal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Volkswagen's Emissions Scandal: How Could It Happen?, Emissions Scandal 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 .
Shortening product life cycle
– it is one of the major threat that Emissions Scandal is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Emissions Scandal 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.
Weighted SWOT Analysis of Volkswagen's Emissions Scandal: How Could It Happen? 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 Volkswagen's Emissions Scandal: How Could It Happen? 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 Volkswagen's Emissions Scandal: How Could It Happen? 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 Volkswagen's Emissions Scandal: How Could It Happen? 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 Volkswagen's Emissions Scandal: How Could It Happen? 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 Emissions Scandal needs to make to build a sustainable competitive advantage.
