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 - – increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
there is backlash against globalization, increasing commodity prices, 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.
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.
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.
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.
Organizational Resilience of Tires Safeguard
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tires Safeguard 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 Tires Safeguard 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.
Ability to recruit top talent
– Tires Safeguard is one of the leading recruiters in the industry. Managers in the Tariffs on Tires (B): The Aftermath are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Tires Safeguard has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tariffs on Tires (B): The Aftermath 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.
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.
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 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.
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 -
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.
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.
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.
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.
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 operating costs
– Compare to the competitors, firm in the HBR case study Tariffs on Tires (B): The Aftermath 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 Tires Safeguard 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Tariffs on Tires (B): The Aftermath 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 Tariffs on Tires (B): The Aftermath can leverage the sales team experience to cultivate customer relationships as Tires Safeguard is planning to shift buying processes online.
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 Tires Safeguard supply chain. Even after few cautionary changes mentioned in the HBR case study - Tariffs on Tires (B): The Aftermath, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tires Safeguard vulnerable to further global disruptions in South East Asia.
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.
Low market penetration in new markets
– Outside its home market of Tires Safeguard, firm in the HBR case study Tariffs on Tires (B): The Aftermath needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
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.
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.
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.
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. Tires Safeguard can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Tires Safeguard 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 Global Business segment.
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 Tires Safeguard in the consumer business. Now Tires Safeguard can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Tires Safeguard 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 Tariffs on Tires (B): The Aftermath - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tires Safeguard to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Better consumer reach
– The expansion of the 5G network will help Tires Safeguard to increase its market reach. Tires Safeguard 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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Tires Safeguard 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.
Leveraging digital technologies
– Tires Safeguard 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.
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 -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tires Safeguard 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 Tariffs on Tires (B): The Aftermath .
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.
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.
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 Tires Safeguard business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tariffs on Tires (B): The Aftermath, Tires Safeguard may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
Stagnating economy with rate increase
– Tires Safeguard 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tires Safeguard with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
Environmental challenges
– Tires Safeguard 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. Tires Safeguard can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
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.
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.