Case Study Description of Chrysler Takeover Attempt
On April 12, 1995, Kirk Kerkorian made an unsolicited offer to buy the outstanding shares of Chrysler Corp. This case analyzes the proposed deal and addresses the key contextual elements contributing to the takeover attempt.
Swot Analysis of "Chrysler Takeover Attempt" written by Richard S. Ruback, William Dewitt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chrysler Takeover facing as an external strategic factors. Some of the topics covered in Chrysler Takeover Attempt case study are - Strategic Management Strategies, Financial management, Negotiations and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Chrysler Takeover Attempt casestudy better are - – talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, technology disruption, increasing commodity prices, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation,
there is backlash against globalization, wage bills are increasing, etc
Introduction to SWOT Analysis of Chrysler Takeover Attempt
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chrysler Takeover Attempt case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chrysler Takeover, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chrysler Takeover 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 Chrysler Takeover Attempt can be done for the following purposes –
1. Strategic planning using facts provided in Chrysler Takeover Attempt case study
2. Improving business portfolio management of Chrysler Takeover
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chrysler Takeover
Strengths Chrysler Takeover Attempt | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chrysler Takeover in Chrysler Takeover Attempt Harvard Business Review case study are -
Highly skilled collaborators
– Chrysler Takeover 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 Chrysler Takeover Attempt HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Chrysler Takeover has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Chrysler Takeover Attempt 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.
Ability to recruit top talent
– Chrysler Takeover is one of the leading recruiters in the industry. Managers in the Chrysler Takeover Attempt are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Finance & Accounting industry
– Chrysler Takeover Attempt firm has clearly differentiated products in the market place. This has enabled Chrysler Takeover to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Chrysler Takeover to invest into research and development (R&D) and innovation.
Innovation driven organization
– Chrysler Takeover is one of the most innovative firm in sector. Manager in Chrysler Takeover Attempt Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Chrysler Takeover 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 Richard S. Ruback, William Dewitt 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 brand equity
– Chrysler Takeover has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chrysler Takeover to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Chrysler Takeover has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chrysler Takeover 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.
Low bargaining power of suppliers
– Suppliers of Chrysler Takeover in the sector have low bargaining power. Chrysler Takeover Attempt has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chrysler Takeover to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Chrysler Takeover 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 Chrysler Takeover Attempt - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Chrysler Takeover in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Chrysler Takeover
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Chrysler Takeover does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Chrysler Takeover Attempt | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chrysler Takeover Attempt are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Chrysler Takeover Attempt, it seems that the employees of Chrysler Takeover 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Richard S. Ruback, William Dewitt suggests that, Chrysler Takeover 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.
Products dominated business model
– Even though Chrysler Takeover 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 - Chrysler Takeover Attempt should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Chrysler Takeover Attempt 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 Chrysler Takeover has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Chrysler Takeover Attempt, in the dynamic environment Chrysler Takeover has struggled to respond to the nimble upstart competition. Chrysler Takeover has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Chrysler Takeover, firm in the HBR case study Chrysler Takeover Attempt needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Chrysler Takeover 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.
Interest costs
– Compare to the competition, Chrysler Takeover 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.
High cash cycle compare to competitors
Chrysler Takeover 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 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 Chrysler Takeover supply chain. Even after few cautionary changes mentioned in the HBR case study - Chrysler Takeover Attempt, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chrysler Takeover vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Chrysler Takeover 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.
Opportunities Chrysler Takeover Attempt | 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 Chrysler Takeover Attempt are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chrysler Takeover can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Chrysler Takeover can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Chrysler Takeover can develop new processes and procedures in Finance & Accounting 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chrysler Takeover can use these opportunities to build new business models that can help the communities that Chrysler Takeover operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Chrysler Takeover 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chrysler Takeover 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, Chrysler Takeover Attempt, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chrysler Takeover in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Chrysler Takeover has opened avenues for new revenue streams for the organization in the industry. This can help Chrysler Takeover to build a more holistic ecosystem as suggested in the Chrysler Takeover Attempt case study. Chrysler Takeover can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Chrysler Takeover in the consumer business. Now Chrysler Takeover can target international markets with far fewer capital restrictions requirements than the existing system.
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. Chrysler Takeover can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chrysler Takeover 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. Chrysler Takeover 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.
Buying journey improvements
– Chrysler Takeover can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Chrysler Takeover Attempt 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.
Manufacturing automation
– Chrysler Takeover can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Threats Chrysler Takeover Attempt External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chrysler Takeover Attempt are -
Shortening product life cycle
– it is one of the major threat that Chrysler Takeover is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Chrysler Takeover.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chrysler Takeover in the Finance & Accounting industry. The Finance & Accounting 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.
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. Chrysler Takeover needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Chrysler Takeover has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Chrysler Takeover needs to keep up with the evolution of technology in the Finance & Accounting 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.
Environmental challenges
– Chrysler Takeover 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. Chrysler Takeover can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Chrysler Takeover
– 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 Chrysler Takeover.
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 Chrysler Takeover in the Finance & Accounting sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Chrysler Takeover 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 Chrysler Takeover with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Chrysler Takeover 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.
High dependence on third party suppliers
– Chrysler Takeover 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.
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 Chrysler Takeover business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Chrysler Takeover Attempt 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 Chrysler Takeover Attempt 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 Chrysler Takeover Attempt 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 Chrysler Takeover Attempt 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 Chrysler Takeover Attempt 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 Chrysler Takeover needs to make to build a sustainable competitive advantage.