Tariffs on Tires (B): The Aftermath SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tariffs on Tires (B): The Aftermath
Supplement to case UV7541. In September 2009, President Barack Obama announced a hefty tariff on low-cost automobile and light truck tires imported from China. Earlier that year, the United Steelworkers of America, which represented workers in many US tire production plants, had filed for protection under Section 421 (the "China safeguard") of the US Trade Act of 1974. Supporters of the decision saw the tariff on Chinese tires as an extension of the president's efforts to enhance the enforcement of trade laws, the position Obama had adopted time and again as a candidate in 2007. Could the tire safeguard provide a template for how policymakers could protect American workers? The B case provides an epilogue.
Swot Analysis of "Tariffs on Tires (B): The Aftermath" written by Peter Debaere, Joonhyung Lee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tires Safeguard facing as an external strategic factors. Some of the topics covered in Tariffs on Tires (B): The Aftermath case study are - Strategic Management Strategies, Globalization, Labor, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Tariffs on Tires (B): The Aftermath casestudy better are - – geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, there is backlash against globalization, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%,
increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Tariffs on Tires (B): The Aftermath
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tariffs on Tires (B): The Aftermath case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tires Safeguard, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tires Safeguard 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 Tariffs on Tires (B): The Aftermath can be done for the following purposes –
1. Strategic planning using facts provided in Tariffs on Tires (B): The Aftermath case study
2. Improving business portfolio management of Tires Safeguard
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 Tires Safeguard
Strengths Tariffs on Tires (B): The Aftermath | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tires Safeguard in Tariffs on Tires (B): The Aftermath Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Tariffs on Tires (B): The Aftermath firm has clearly differentiated products in the market place. This has enabled Tires Safeguard to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Tires Safeguard to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Tires Safeguard 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 Tariffs on Tires (B): The Aftermath HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Tires Safeguard 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.
Effective Research and Development (R&D)
– Tires Safeguard has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Tariffs on Tires (B): The Aftermath - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Global Business field
– Tires Safeguard 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 Tires Safeguard in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Tires Safeguard 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 Tires Safeguard is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tariffs on Tires (B): The Aftermath Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Tires Safeguard in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Tires Safeguard has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tires Safeguard to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Tires Safeguard is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Tires Safeguard is one of the most innovative firm in sector. Manager in Tariffs on Tires (B): The Aftermath Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Tires Safeguard is present in almost all the verticals within the industry. This has provided firm in Tariffs on Tires (B): The Aftermath 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.
Low bargaining power of suppliers
– Suppliers of Tires Safeguard in the sector have low bargaining power. Tariffs on Tires (B): The Aftermath has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tires Safeguard to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Tariffs on Tires (B): The Aftermath | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tariffs on Tires (B): The Aftermath are -
Workers concerns about automation
– As automation is fast increasing in the segment, Tires Safeguard needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tires Safeguard is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tariffs on Tires (B): The Aftermath 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
Tires Safeguard 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.
Need for greater diversity
– Tires Safeguard 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 bargaining power of channel partners
– Because of the regulatory requirements, Peter Debaere, Joonhyung Lee suggests that, Tires Safeguard 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.
Skills based hiring
– The stress on hiring functional specialists at Tires Safeguard 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.
Slow decision making process
– As mentioned earlier in the report, Tires Safeguard 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. Tires Safeguard 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 star products
– The top 2 products and services of the firm as mentioned in the Tariffs on Tires (B): The Aftermath 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 Tires Safeguard has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Tariffs on Tires (B): The Aftermath, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tariffs on Tires (B): The Aftermath, it seems that the employees of Tires Safeguard 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.
Interest costs
– Compare to the competition, Tires Safeguard 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.
Opportunities Tariffs on Tires (B): The Aftermath | 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 Tariffs on Tires (B): The Aftermath are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tires Safeguard can use these opportunities to build new business models that can help the communities that Tires Safeguard operates in. Secondly it can use opportunities from government spending in Global Business sector.
Developing new processes and practices
– Tires Safeguard can develop new processes and procedures in Global Business 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tires Safeguard 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, Tariffs on Tires (B): The Aftermath, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tires Safeguard 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.
Loyalty marketing
– Tires Safeguard 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.
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. Tires Safeguard 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. Tires Safeguard 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tires Safeguard 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 Tires Safeguard 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 Tires Safeguard to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Tires Safeguard 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tires Safeguard is facing challenges because of the dominance of functional experts in the organization. Tariffs on Tires (B): The Aftermath 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tires Safeguard can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Tires Safeguard 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 Tires Safeguard has opened avenues for new revenue streams for the organization in the industry. This can help Tires Safeguard to build a more holistic ecosystem as suggested in the Tariffs on Tires (B): The Aftermath case study. Tires Safeguard can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Tariffs on Tires (B): The Aftermath External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tariffs on Tires (B): The Aftermath 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. Tires Safeguard 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.
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.
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. Tires Safeguard needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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. Tires Safeguard can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Tires Safeguard 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.
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 Tires Safeguard in the Global Business sector and impact the bottomline of the organization.
Consumer confidence and its impact on Tires Safeguard 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.
Increasing wage structure of Tires Safeguard
– 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 Tires Safeguard.
Shortening product life cycle
– it is one of the major threat that Tires Safeguard is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Tires Safeguard has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Tires Safeguard 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tires Safeguard 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.
High dependence on third party suppliers
– Tires Safeguard high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Tariffs on Tires (B): The Aftermath 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 Tariffs on Tires (B): The Aftermath 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 Tariffs on Tires (B): The Aftermath 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 Tariffs on Tires (B): The Aftermath 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 Tariffs on Tires (B): The Aftermath 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 Tires Safeguard needs to make to build a sustainable competitive advantage.
