Case Study Description of Hidrovias do Brasil: Navigating Unchartered Waters
Since its founding eight years earlier, Hidrovias do Brasil ("Hidrovias"), an integrated logistics provider serving corporate customers exporting products from South America via the Atlantic Ocean, had grown to 900 employees and $253 million in annual revenues. Hidrovias was founded by the Brazilian private equity firm, Patria Investments, who had built the business from the ground up, forging and nurturing relationships with customers, investors, government entities, and suppliers. As Bruno Serapiao, Hidrovias's CEO pondered next steps for the company, he considered: What had been the key drivers of Hidrovias's success to date? What were the major challenges? And, what was the best path for the company going forward?
Swot Analysis of "Hidrovias do Brasil: Navigating Unchartered Waters" written by Boris Groysberg, Sarah L. Abbott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hidrovias Hidrovias's facing as an external strategic factors. Some of the topics covered in Hidrovias do Brasil: Navigating Unchartered Waters case study are - Strategic Management Strategies, Entrepreneurial finance, Entrepreneurial management, Financial management, Human resource management, Leadership, Operations management, Strategy and Technology & Operations.
Some of the macro environment factors that can be used to understand the Hidrovias do Brasil: Navigating Unchartered Waters casestudy better are - – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing transportation and logistics costs, there is backlash against globalization, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models,
banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Hidrovias do Brasil: Navigating Unchartered Waters
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hidrovias do Brasil: Navigating Unchartered Waters case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hidrovias Hidrovias's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hidrovias Hidrovias'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 Hidrovias do Brasil: Navigating Unchartered Waters can be done for the following purposes –
1. Strategic planning using facts provided in Hidrovias do Brasil: Navigating Unchartered Waters case study
2. Improving business portfolio management of Hidrovias Hidrovias's
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hidrovias Hidrovias's
Strengths Hidrovias do Brasil: Navigating Unchartered Waters | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hidrovias Hidrovias's in Hidrovias do Brasil: Navigating Unchartered Waters Harvard Business Review case study are -
High brand equity
– Hidrovias Hidrovias's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hidrovias Hidrovias's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Hidrovias Hidrovias's in the sector have low bargaining power. Hidrovias do Brasil: Navigating Unchartered Waters has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hidrovias Hidrovias's to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Hidrovias Hidrovias's is one of the most innovative firm in sector. Manager in Hidrovias do Brasil: Navigating Unchartered Waters Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Hidrovias Hidrovias's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hidrovias Hidrovias'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.
Training and development
– Hidrovias Hidrovias's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hidrovias do Brasil: Navigating Unchartered Waters 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.
Analytics focus
– Hidrovias Hidrovias's 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 Boris Groysberg, Sarah L. Abbott 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.
Sustainable margins compare to other players in Technology & Operations industry
– Hidrovias do Brasil: Navigating Unchartered Waters firm has clearly differentiated products in the market place. This has enabled Hidrovias Hidrovias's to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Hidrovias Hidrovias's to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Hidrovias Hidrovias'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.
Diverse revenue streams
– Hidrovias Hidrovias's is present in almost all the verticals within the industry. This has provided firm in Hidrovias do Brasil: Navigating Unchartered Waters 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.
Operational resilience
– The operational resilience strategy in the Hidrovias do Brasil: Navigating Unchartered Waters 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.
Ability to recruit top talent
– Hidrovias Hidrovias's is one of the leading recruiters in the industry. Managers in the Hidrovias do Brasil: Navigating Unchartered Waters are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Hidrovias Hidrovias'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.
Weaknesses Hidrovias do Brasil: Navigating Unchartered Waters | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hidrovias do Brasil: Navigating Unchartered Waters are -
Skills based hiring
– The stress on hiring functional specialists at Hidrovias Hidrovias'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.
Interest costs
– Compare to the competition, Hidrovias Hidrovias'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.
Products dominated business model
– Even though Hidrovias Hidrovias's 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 - Hidrovias do Brasil: Navigating Unchartered Waters should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Hidrovias Hidrovias's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Hidrovias Hidrovias's is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Hidrovias Hidrovias's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hidrovias Hidrovias's to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Hidrovias Hidrovias's 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 star products
– The top 2 products and services of the firm as mentioned in the Hidrovias do Brasil: Navigating Unchartered Waters 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 Hidrovias Hidrovias's has relatively successful track record of launching new products.
Need for greater diversity
– Hidrovias Hidrovias'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.
Low market penetration in new markets
– Outside its home market of Hidrovias Hidrovias's, firm in the HBR case study Hidrovias do Brasil: Navigating Unchartered Waters needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hidrovias do Brasil: Navigating Unchartered Waters, it seems that the employees of Hidrovias Hidrovias's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Hidrovias do Brasil: Navigating Unchartered Waters HBR case study mentions - Hidrovias Hidrovias'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.
Opportunities Hidrovias do Brasil: Navigating Unchartered Waters | 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 Hidrovias do Brasil: Navigating Unchartered Waters are -
Using analytics as competitive advantage
– Hidrovias Hidrovias'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 Hidrovias do Brasil: Navigating Unchartered Waters - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hidrovias Hidrovias'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 Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hidrovias Hidrovias'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. Hidrovias Hidrovias'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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hidrovias Hidrovias's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Hidrovias Hidrovias'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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hidrovias Hidrovias's 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 Hidrovias Hidrovias's to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hidrovias Hidrovias's is facing challenges because of the dominance of functional experts in the organization. Hidrovias do Brasil: Navigating Unchartered Waters 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.
Buying journey improvements
– Hidrovias Hidrovias's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hidrovias do Brasil: Navigating Unchartered Waters suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Hidrovias Hidrovias's has opened avenues for new revenue streams for the organization in the industry. This can help Hidrovias Hidrovias's to build a more holistic ecosystem as suggested in the Hidrovias do Brasil: Navigating Unchartered Waters case study. Hidrovias Hidrovias's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Hidrovias Hidrovias'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 Hidrovias Hidrovias'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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hidrovias Hidrovias's 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.
Developing new processes and practices
– Hidrovias Hidrovias's can develop new processes and procedures in Technology & Operations 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Hidrovias Hidrovias's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Hidrovias do Brasil: Navigating Unchartered Waters External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hidrovias do Brasil: Navigating Unchartered Waters are -
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 Hidrovias Hidrovias's business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Hidrovias Hidrovias's has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Hidrovias Hidrovias's needs to keep up with the evolution of technology in the Technology & Operations 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.
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. Hidrovias Hidrovias's needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hidrovias Hidrovias's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Hidrovias Hidrovias's is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Hidrovias Hidrovias'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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hidrovias Hidrovias's in the Technology & Operations industry. The Technology & Operations 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hidrovias do Brasil: Navigating Unchartered Waters, Hidrovias Hidrovias'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 Technology & Operations .
Regulatory challenges
– Hidrovias Hidrovias'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 Technology & Operations industry regulations.
Consumer confidence and its impact on Hidrovias Hidrovias's 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.
High dependence on third party suppliers
– Hidrovias Hidrovias'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.
Environmental challenges
– Hidrovias Hidrovias's 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. Hidrovias Hidrovias's can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Weighted SWOT Analysis of Hidrovias do Brasil: Navigating Unchartered Waters 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 Hidrovias do Brasil: Navigating Unchartered Waters 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 Hidrovias do Brasil: Navigating Unchartered Waters 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 Hidrovias do Brasil: Navigating Unchartered Waters 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 Hidrovias do Brasil: Navigating Unchartered Waters 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 Hidrovias Hidrovias's needs to make to build a sustainable competitive advantage.