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 inequality as vast percentage of new income is going to the top 1%, technology disruption, geopolitical disruptions, increasing commodity prices, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, 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 -
Analytics focus
– Emissions Scandal 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 N. Craig Smith, Erin McCormick 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.
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.
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.
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.
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.
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.
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.
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.
Organizational Resilience of Emissions Scandal
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Emissions Scandal does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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 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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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 -
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.
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.
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.
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.
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.
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 Emissions Scandal in the consumer business. Now Emissions Scandal can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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.
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.
Loyalty marketing
– Emissions Scandal 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.
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 -
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.
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.
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.
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 .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Emissions Scandal can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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.
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.
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.
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.
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.