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 - – central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, there is increasing trade war between United States & China, increasing energy prices, cloud computing is disrupting traditional business models, geopolitical disruptions,
increasing commodity prices, there is backlash against globalization, 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 -
Learning organization
- Emissions Scandal 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 Emissions Scandal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Volkswagen's Emissions Scandal: How Could It Happen? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Emissions Scandal has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Emissions Scandal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Emissions Scandal 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.
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 -
High operating costs
– Compare to the competitors, firm in the HBR case study Volkswagen's Emissions Scandal: How Could It Happen? 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 Emissions Scandal 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Emissions Scandal 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.
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.
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 Emissions Scandal supply chain. Even after few cautionary changes mentioned in the HBR case study - Volkswagen's Emissions Scandal: How Could It Happen?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Emissions Scandal vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Emissions Scandal is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Emissions Scandal needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Emissions Scandal to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Emissions Scandal 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.
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.
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.
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.
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.
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.
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 -
Developing new processes and practices
– Emissions Scandal 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.
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.
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.
Buying journey improvements
– Emissions Scandal can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Volkswagen's Emissions Scandal: How Could It Happen? 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Emissions Scandal 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.
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.
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.
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.
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. Emissions Scandal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Emissions Scandal can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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 -
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.
Consumer confidence and its impact on Emissions Scandal 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.
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.
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.
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.
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 Emissions Scandal in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Emissions Scandal has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Emissions Scandal needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Emissions Scandal 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 Volkswagen's Emissions Scandal: How Could It Happen? .
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.
Increasing wage structure of Emissions Scandal
– 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 Emissions Scandal.
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.
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.
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.