Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Disruption in Detroit: Ford, Silicon Valley, and Beyond (B)
The (A) case focuses on the Ford Motor Company in Spring 2016 and how its then-CEO, Mark Fields, and his senior management team should best respond to several emerging disruptive technologies that will ultimately force the automaker to modify its current business model. These disruptive technologies includes electric vehicles, connectivity autonomous vehicles, car ownership and use, and emergence of subcompact cares. Having experienced a successful financial turnaround under the leadership of its prior CEO, Alan Mulally, during and after the 2008-09 recession, Ford must now decide whether its current investment in responding to these new emerging technologies is too much, too little or just right. As Ford considers the degree of its response, it also faces new competitors in the fast-changing automotive landscape -- besides its traditional automaker rivals like General Motors, Toyota and Hyundai -- that now includes the Google, Apple and Tesla from the Silicon Valley as well as BYD and LeEco from China. Ford's history of innovation in response to past opportunities and challenges is also discussed. The (B) case provides an update on Ford's strategy during the fall of 2017, following the dismissal of Fields and the appointment of former Steelcase CEO and Fort Smart Mobility (FSM) chair Jim Hackett as his successor in May 2017. Faced with a drop of 37 percent in Ford's stock price during Field's tenure, declining year-over-year vehicle sales in early 2017, and the view of some Ford Board members that the company needed to more successfully communicate its recent strategic moves in the mobility space, Hackett lays five themes to turnaround the company, while keeping his eye on the "now, near, and far" on the company's performance.
Swot Analysis of "Disruption in Detroit: Ford, Silicon Valley, and Beyond (B)" written by Ernest Gundling includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ford Ford's facing as an external strategic factors. Some of the topics covered in Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) case study are - Strategic Management Strategies, Change management, Disruptive innovation, Leadership, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) casestudy better are - – increasing commodity prices, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Disruption in Detroit: Ford, Silicon Valley, and Beyond (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ford Ford's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ford Ford'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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) can be done for the following purposes –
1. Strategic planning using facts provided in Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) case study
2. Improving business portfolio management of Ford Ford's
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ford Ford's
Strengths Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ford Ford's in Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) Harvard Business Review case study are -
High switching costs
– The high switching costs that Ford Ford'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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Ford Ford's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ford Ford's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Ford Ford's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ford Ford's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Ford Ford's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ford Ford'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.
Learning organization
- Ford Ford's 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 Ford Ford's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Ford Ford's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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.
Diverse revenue streams
– Ford Ford's is present in almost all the verticals within the industry. This has provided firm in Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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.
Effective Research and Development (R&D)
– Ford Ford's 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) - 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 recruit top talent
– Ford Ford's is one of the leading recruiters in the industry. Managers in the Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Ford Ford's 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 lead change in Leadership & Managing People field
– Ford Ford's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ford Ford's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) are -
Slow to strategic competitive environment developments
– As Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) HBR case study mentions - Ford Ford'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.
High cash cycle compare to competitors
Ford Ford's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Ernest Gundling suggests that, Ford Ford's 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
– Ford Ford'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.
Interest costs
– Compare to the competition, Ford Ford'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.
Increasing silos among functional specialists
– The organizational structure of Ford Ford's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ford Ford's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ford Ford's to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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 Ford Ford's has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Ford Ford's, firm in the HBR case study Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Ford Ford'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.
Capital Spending Reduction
– Even during the low interest decade, Ford Ford'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.
Aligning sales with marketing
– It come across in the case study Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) can leverage the sales team experience to cultivate customer relationships as Ford Ford's is planning to shift buying processes online.
Opportunities Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) | 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ford Ford'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. Ford Ford'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 Ford Ford's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ford Ford's 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, Disruption in Detroit: Ford, Silicon Valley, and Beyond (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ford Ford's can use these opportunities to build new business models that can help the communities that Ford Ford's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Developing new processes and practices
– Ford Ford's can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ford Ford's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ford Ford'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 Ford Ford's to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Ford Ford's to increase its market reach. Ford Ford's 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.
Manufacturing automation
– Ford Ford's can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
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 Ford Ford's in the consumer business. Now Ford Ford's can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Ford Ford'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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ford Ford's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Ford Ford's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Ford Ford'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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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 Ford Ford's business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Ford Ford'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. Ford Ford's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Ford Ford's in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Ford Ford's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ford Ford's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ford Ford's in the Leadership & Managing People industry. The Leadership & Managing People 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.
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 Ford Ford's.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ford Ford's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Disruption in Detroit: Ford, Silicon Valley, and Beyond (B), Ford Ford'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 Leadership & Managing People .
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. Ford Ford's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Ford Ford's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Ford Ford'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.
Weighted SWOT Analysis of Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond (B) 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 Ford Ford's needs to make to build a sustainable competitive advantage.
