Manpreet Singh, chief executive officer of the Bosch multi-brand car service provider Motorcafe, wanted to scale up his business, which he established in 2010 in Mohali, India. The multi-brand car service sector promised huge market potential for Singh, but he faced some challenges: Bosch had failed to provide the expected support; the brand was being diluted by poor services offered by other service providers in neighbouring areas; competition from other multi-brand players in the Indian market was ever-growing; original equipment manufacturer workshops were renewing their competitive efforts; and customer needs were rapidly changing. How should Singh scale up his venture in the face of changing market dynamics and implement Motorcafe's innovative value proposition for Indian car owners? The authors Somnath Chakrabarti, Sanjay Chaudhary, Prem Prakash Dayal are affiliated with Indian Institute of Management Kashipur.
Swot Analysis of "Motorcafe: Scaling Up" written by Somnath Chakrabarti, Sanjay Chaudhary, Prem Prakash Dayal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Motorcafe Singh facing as an external strategic factors. Some of the topics covered in Motorcafe: Scaling Up case study are - Strategic Management Strategies, Marketing, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Motorcafe: Scaling Up casestudy better are - – increasing transportation and logistics costs, central banks are concerned over increasing inflation, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, wage bills are increasing,
increasing government debt because of Covid-19 spendings, technology disruption, etc
Introduction to SWOT Analysis of Motorcafe: Scaling Up
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Motorcafe: Scaling Up case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Motorcafe Singh, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Motorcafe Singh 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 Motorcafe: Scaling Up can be done for the following purposes –
1. Strategic planning using facts provided in Motorcafe: Scaling Up case study
2. Improving business portfolio management of Motorcafe Singh
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 Motorcafe Singh
Strengths Motorcafe: Scaling Up | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Motorcafe Singh in Motorcafe: Scaling Up Harvard Business Review case study are -
Analytics focus
– Motorcafe Singh 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 Somnath Chakrabarti, Sanjay Chaudhary, Prem Prakash Dayal 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.
High switching costs
– The high switching costs that Motorcafe Singh has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Motorcafe: Scaling Up firm has clearly differentiated products in the market place. This has enabled Motorcafe Singh to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Motorcafe Singh to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Motorcafe Singh has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Motorcafe Singh has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Motorcafe Singh is present in almost all the verticals within the industry. This has provided firm in Motorcafe: Scaling Up 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Motorcafe Singh digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Motorcafe Singh 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.
Effective Research and Development (R&D)
– Motorcafe Singh 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 Motorcafe: Scaling Up - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Motorcafe Singh
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Motorcafe Singh does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Motorcafe Singh 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 Motorcafe Singh in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Motorcafe Singh is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Motorcafe Singh 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.
Training and development
– Motorcafe Singh has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Motorcafe: Scaling Up 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.
Weaknesses Motorcafe: Scaling Up | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Motorcafe: Scaling Up are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Motorcafe: Scaling Up, is just above the industry average. Motorcafe Singh 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.
Skills based hiring
– The stress on hiring functional specialists at Motorcafe Singh 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Motorcafe: Scaling Up, it seems that the employees of Motorcafe Singh 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Motorcafe Singh needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Motorcafe Singh supply chain. Even after few cautionary changes mentioned in the HBR case study - Motorcafe: Scaling Up, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Motorcafe Singh vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Motorcafe: Scaling Up, in the dynamic environment Motorcafe Singh has struggled to respond to the nimble upstart competition. Motorcafe Singh has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Motorcafe: Scaling Up 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 Motorcafe: Scaling Up can leverage the sales team experience to cultivate customer relationships as Motorcafe Singh is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Motorcafe: Scaling Up 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 Motorcafe Singh 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Somnath Chakrabarti, Sanjay Chaudhary, Prem Prakash Dayal suggests that, Motorcafe Singh 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.
Need for greater diversity
– Motorcafe Singh 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.
Slow to strategic competitive environment developments
– As Motorcafe: Scaling Up HBR case study mentions - Motorcafe Singh 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 Motorcafe: Scaling Up | 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 Motorcafe: Scaling Up are -
Using analytics as competitive advantage
– Motorcafe Singh 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 Motorcafe: Scaling Up - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Motorcafe Singh to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Motorcafe Singh in the consumer business. Now Motorcafe Singh can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Motorcafe Singh 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.
Better consumer reach
– The expansion of the 5G network will help Motorcafe Singh to increase its market reach. Motorcafe Singh 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.
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 Motorcafe Singh to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for Motorcafe Singh 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Motorcafe Singh 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, Motorcafe: Scaling Up, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Motorcafe Singh is facing challenges because of the dominance of functional experts in the organization. Motorcafe: Scaling Up 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 Motorcafe Singh can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Motorcafe Singh 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Motorcafe Singh 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 Motorcafe Singh to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Motorcafe Singh 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.
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. Motorcafe Singh can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Motorcafe: Scaling Up External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Motorcafe: Scaling Up are -
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 dependence on third party suppliers
– Motorcafe Singh 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Motorcafe Singh 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.
Increasing wage structure of Motorcafe Singh
– 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 Motorcafe Singh.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Motorcafe: Scaling Up, Motorcafe Singh 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 .
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. Motorcafe Singh needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Motorcafe Singh in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Motorcafe Singh 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 Motorcafe Singh with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Motorcafe Singh.
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. Motorcafe Singh can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Motorcafe Singh 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 Motorcafe: Scaling Up .
Environmental challenges
– Motorcafe Singh 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. Motorcafe Singh can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Motorcafe: Scaling Up 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 Motorcafe: Scaling Up 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 Motorcafe: Scaling Up 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 Motorcafe: Scaling Up 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 Motorcafe: Scaling Up 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 Motorcafe Singh needs to make to build a sustainable competitive advantage.
