Uruguay: Facing the 21st Century SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Uruguay: Facing the 21st Century
In the fall of 2017, self-made businessleader Edgardo Novick pondered his campaign to be elected President of Uruguay, "the Switzerland of Latin America." Inspired by populist revolts against the statue quo observable worldwide, Novick hoped he could ride popular momentum to break the political monopoly of the traditional parties and return the country to its past greatness. Uruguay had been one of the world's most successful countries in the nineteenth and early twentieth centuries, but had since experienced a long period of relative decline. Could Novick's campaign turn the tide of history? And what policy should Uruguay adopt with regard to the world economy?
Authors :: Sophus A. Reinert, Michael Chu, Carin-Isabel Knoop
Swot Analysis of "Uruguay: Facing the 21st Century" written by Sophus A. Reinert, Michael Chu, Carin-Isabel Knoop includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Uruguay Novick facing as an external strategic factors. Some of the topics covered in Uruguay: Facing the 21st Century case study are - Strategic Management Strategies, Economy, Globalization, Government and Global Business.
Some of the macro environment factors that can be used to understand the Uruguay: Facing the 21st Century casestudy better are - – central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Uruguay: Facing the 21st Century
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Uruguay: Facing the 21st Century case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Uruguay Novick, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Uruguay Novick 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 Uruguay: Facing the 21st Century can be done for the following purposes –
1. Strategic planning using facts provided in Uruguay: Facing the 21st Century case study
2. Improving business portfolio management of Uruguay Novick
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Uruguay Novick
Strengths Uruguay: Facing the 21st Century | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Uruguay Novick in Uruguay: Facing the 21st Century Harvard Business Review case study are -
Innovation driven organization
– Uruguay Novick is one of the most innovative firm in sector. Manager in Uruguay: Facing the 21st Century Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Uruguay Novick in the sector have low bargaining power. Uruguay: Facing the 21st Century has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Uruguay Novick to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Uruguay Novick 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 Uruguay Novick in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Uruguay Novick has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Uruguay Novick to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Uruguay Novick 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
– Uruguay Novick has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Uruguay Novick 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.
Diverse revenue streams
– Uruguay Novick is present in almost all the verticals within the industry. This has provided firm in Uruguay: Facing the 21st Century 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.
Ability to recruit top talent
– Uruguay Novick is one of the leading recruiters in the industry. Managers in the Uruguay: Facing the 21st Century 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 Uruguay Novick 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.
Sustainable margins compare to other players in Global Business industry
– Uruguay: Facing the 21st Century firm has clearly differentiated products in the market place. This has enabled Uruguay Novick to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Uruguay Novick to invest into research and development (R&D) and innovation.
Learning organization
- Uruguay Novick 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 Uruguay Novick is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Uruguay: Facing the 21st Century Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Uruguay Novick 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 Sophus A. Reinert, Michael Chu, Carin-Isabel Knoop can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Uruguay: Facing the 21st Century | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Uruguay: Facing the 21st Century are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Uruguay Novick is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Uruguay: Facing the 21st Century 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 cash cycle compare to competitors
Uruguay Novick has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Sophus A. Reinert, Michael Chu, Carin-Isabel Knoop suggests that, Uruguay Novick 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Uruguay: Facing the 21st Century 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 Uruguay Novick 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Uruguay Novick, firm in the HBR case study Uruguay: Facing the 21st Century needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Uruguay: Facing the 21st Century, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Uruguay Novick 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 - Uruguay: Facing the 21st Century should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Uruguay Novick is dominated by functional specialists. It is not different from other players in the Global Business segment. Uruguay Novick needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Uruguay Novick to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Uruguay Novick 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Uruguay Novick 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 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 Uruguay Novick supply chain. Even after few cautionary changes mentioned in the HBR case study - Uruguay: Facing the 21st Century, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Uruguay Novick vulnerable to further global disruptions in South East Asia.
Opportunities Uruguay: Facing the 21st Century | 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 Uruguay: Facing the 21st Century are -
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 Uruguay Novick in the consumer business. Now Uruguay Novick can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Uruguay Novick to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for Uruguay Novick 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Uruguay Novick in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Uruguay Novick 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Uruguay Novick 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 Uruguay Novick to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Uruguay Novick can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Loyalty marketing
– Uruguay Novick 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.
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. Uruguay Novick can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Uruguay Novick can use these opportunities to build new business models that can help the communities that Uruguay Novick operates in. Secondly it can use opportunities from government spending in Global Business sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Uruguay Novick can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Uruguay Novick 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. Uruguay Novick 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Uruguay Novick is facing challenges because of the dominance of functional experts in the organization. Uruguay: Facing the 21st Century case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Uruguay: Facing the 21st Century External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Uruguay: Facing the 21st Century are -
High dependence on third party suppliers
– Uruguay Novick 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.
Increasing wage structure of Uruguay Novick
– 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 Uruguay Novick.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Uruguay Novick can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Uruguay Novick business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Uruguay Novick in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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. Uruguay Novick 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 Uruguay Novick 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.
Regulatory challenges
– Uruguay Novick 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 Global Business industry regulations.
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. Uruguay Novick needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Uruguay Novick has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Uruguay Novick needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Uruguay Novick is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Uruguay Novick in the Global Business sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Uruguay: Facing the 21st Century 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 Uruguay: Facing the 21st Century 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 Uruguay: Facing the 21st Century 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 Uruguay: Facing the 21st Century 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 Uruguay: Facing the 21st Century 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 Uruguay Novick needs to make to build a sustainable competitive advantage.
