Swot Analysis of "OXXO's Turf War Against Extra, Video Supplement" written by Tatiana Sandino, Gerardo Perez Cavazos, Annelena Lobb includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oxxo Oxxo's facing as an external strategic factors. Some of the topics covered in OXXO's Turf War Against Extra, Video Supplement case study are - Strategic Management Strategies, Organizational culture, Organizational structure and Strategy & Execution.
Some of the macro environment factors that can be used to understand the OXXO's Turf War Against Extra, Video Supplement casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of OXXO's Turf War Against Extra, Video Supplement
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in OXXO's Turf War Against Extra, Video Supplement case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oxxo Oxxo's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oxxo Oxxo's 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 OXXO's Turf War Against Extra, Video Supplement can be done for the following purposes –
1. Strategic planning using facts provided in OXXO's Turf War Against Extra, Video Supplement case study
2. Improving business portfolio management of Oxxo Oxxo's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oxxo Oxxo's
Strengths OXXO's Turf War Against Extra, Video Supplement | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oxxo Oxxo's in OXXO's Turf War Against Extra, Video Supplement Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Oxxo Oxxo's 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 Oxxo Oxxo's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Oxxo Oxxo's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Oxxo Oxxo's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Oxxo Oxxo's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the OXXO's Turf War Against Extra, Video Supplement 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Oxxo Oxxo's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oxxo Oxxo's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of Oxxo Oxxo's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Oxxo Oxxo's 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 OXXO's Turf War Against Extra, Video Supplement HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– OXXO's Turf War Against Extra, Video Supplement firm has clearly differentiated products in the market place. This has enabled Oxxo Oxxo's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Oxxo Oxxo's to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Oxxo Oxxo's 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.
Training and development
– Oxxo Oxxo's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in OXXO's Turf War Against Extra, Video Supplement Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Oxxo Oxxo's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oxxo Oxxo's 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.
High brand equity
– Oxxo Oxxo's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oxxo Oxxo's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses OXXO's Turf War Against Extra, Video Supplement | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of OXXO's Turf War Against Extra, Video Supplement are -
Interest costs
– Compare to the competition, Oxxo Oxxo's 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.
Slow decision making process
– As mentioned earlier in the report, Oxxo Oxxo's 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. Oxxo Oxxo's 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.
Need for greater diversity
– Oxxo Oxxo's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study OXXO's Turf War Against Extra, Video Supplement 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 Oxxo Oxxo's 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the OXXO's Turf War Against Extra, Video Supplement 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 Oxxo Oxxo's has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study OXXO's Turf War Against Extra, Video Supplement, is just above the industry average. Oxxo Oxxo's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As OXXO's Turf War Against Extra, Video Supplement HBR case study mentions - Oxxo Oxxo's 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.
Skills based hiring
– The stress on hiring functional specialists at Oxxo Oxxo's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Oxxo Oxxo's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Oxxo Oxxo's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oxxo Oxxo's to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Oxxo Oxxo's products
– To increase the profitability and margins on the products, Oxxo Oxxo's needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Oxxo Oxxo's 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.
Opportunities OXXO's Turf War Against Extra, Video Supplement | 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 OXXO's Turf War Against Extra, Video Supplement are -
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 Oxxo Oxxo's 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.
Leveraging digital technologies
– Oxxo Oxxo's 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.
Developing new processes and practices
– Oxxo Oxxo's can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Oxxo Oxxo's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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 Oxxo Oxxo's in the consumer business. Now Oxxo Oxxo's can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Oxxo Oxxo's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Oxxo Oxxo's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Oxxo Oxxo's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Using analytics as competitive advantage
– Oxxo Oxxo's 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 OXXO's Turf War Against Extra, Video Supplement - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Oxxo Oxxo's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Oxxo Oxxo's 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. Oxxo Oxxo's 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.
Loyalty marketing
– Oxxo Oxxo's 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.
Learning at scale
– Online learning technologies has now opened space for Oxxo Oxxo's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Oxxo Oxxo's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats OXXO's Turf War Against Extra, Video Supplement External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study OXXO's Turf War Against Extra, Video Supplement are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study OXXO's Turf War Against Extra, Video Supplement, Oxxo Oxxo's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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
– Oxxo Oxxo's 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.
Regulatory challenges
– Oxxo Oxxo's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Oxxo Oxxo's in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Oxxo Oxxo's in the Strategy & Execution industry. The Strategy & Execution 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Oxxo Oxxo's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Oxxo Oxxo's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oxxo Oxxo's 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 OXXO's Turf War Against Extra, Video Supplement .
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 Oxxo Oxxo's business can come under increasing regulations regarding data privacy, data security, etc.
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 Oxxo Oxxo's.
Stagnating economy with rate increase
– Oxxo Oxxo's 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of OXXO's Turf War Against Extra, Video Supplement 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 OXXO's Turf War Against Extra, Video Supplement 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 OXXO's Turf War Against Extra, Video Supplement 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 OXXO's Turf War Against Extra, Video Supplement 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 OXXO's Turf War Against Extra, Video Supplement 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 Oxxo Oxxo's needs to make to build a sustainable competitive advantage.
