Case Study Description of Soluciones Mexicanas S.A. de C.V.
The chief executive officer (CEO) of a small chemical manufacturing operation is assessing his company's performance. Students are required to: (1) perform an industry and corporate size-up, (2) do competitor and consumer analyses, (3) complete and interpret a statement of cash flows, (4) calculate and analyze ratios, (5) perform qualitative analyses of both the chemical department and the sales department, (6) perform qualitative analysis and differential calculations for each of two business opportunities, analyze the financing options available to the business, and do both income statement and balance sheet projections and analyses.
Swot Analysis of "Soluciones Mexicanas S.A. de C.V." written by Elizabeth M.A. Grasby, Adrian Gomez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Analyses Perform facing as an external strategic factors. Some of the topics covered in Soluciones Mexicanas S.A. de C.V. case study are - Strategic Management Strategies, Costs, Financial analysis, International business and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Soluciones Mexicanas S.A. de C.V. casestudy better are - – there is backlash against globalization, increasing commodity prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
geopolitical disruptions, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Soluciones Mexicanas S.A. de C.V.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Soluciones Mexicanas S.A. de C.V. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Analyses Perform, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Analyses Perform 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 Soluciones Mexicanas S.A. de C.V. can be done for the following purposes –
1. Strategic planning using facts provided in Soluciones Mexicanas S.A. de C.V. case study
2. Improving business portfolio management of Analyses Perform
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 Analyses Perform
Strengths Soluciones Mexicanas S.A. de C.V. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Analyses Perform in Soluciones Mexicanas S.A. de C.V. Harvard Business Review case study are -
Learning organization
- Analyses Perform 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 Analyses Perform is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Soluciones Mexicanas S.A. de C.V. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Finance & Accounting field
– Analyses Perform 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 Analyses Perform in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Analyses Perform 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 Soluciones Mexicanas S.A. de C.V. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Analyses Perform 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 Soluciones Mexicanas S.A. de C.V. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Analyses Perform is one of the leading recruiters in the industry. Managers in the Soluciones Mexicanas S.A. de C.V. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Analyses Perform has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Analyses Perform to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Analyses Perform is present in almost all the verticals within the industry. This has provided firm in Soluciones Mexicanas S.A. de C.V. 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 Finance & Accounting segment
- digital transformation varies from industry to industry. For Analyses Perform digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Analyses Perform 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.
Organizational Resilience of Analyses Perform
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Analyses Perform does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Analyses Perform has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Analyses Perform 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.
Analytics focus
– Analyses Perform 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 Elizabeth M.A. Grasby, Adrian Gomez 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 Finance & Accounting industry
– Soluciones Mexicanas S.A. de C.V. firm has clearly differentiated products in the market place. This has enabled Analyses Perform to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Analyses Perform to invest into research and development (R&D) and innovation.
Weaknesses Soluciones Mexicanas S.A. de C.V. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Soluciones Mexicanas S.A. de C.V. are -
High operating costs
– Compare to the competitors, firm in the HBR case study Soluciones Mexicanas S.A. de C.V. 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 Analyses Perform 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Analyses Perform, firm in the HBR case study Soluciones Mexicanas S.A. de C.V. 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 Soluciones Mexicanas S.A. de C.V., it seems that the employees of Analyses Perform 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Analyses Perform is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Soluciones Mexicanas S.A. de C.V. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Soluciones Mexicanas S.A. de C.V. HBR case study mentions - Analyses Perform 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.
Products dominated business model
– Even though Analyses Perform 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 - Soluciones Mexicanas S.A. de C.V. should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Analyses Perform has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Analyses Perform even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Analyses Perform 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.
High cash cycle compare to competitors
Analyses Perform 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.
Lack of clear differentiation of Analyses Perform products
– To increase the profitability and margins on the products, Analyses Perform needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Analyses Perform 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.
Opportunities Soluciones Mexicanas S.A. de C.V. | 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 Soluciones Mexicanas S.A. de C.V. are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Analyses Perform 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Analyses Perform 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.
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 Analyses Perform in the consumer business. Now Analyses Perform can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Analyses Perform 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 Soluciones Mexicanas S.A. de C.V. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Analyses Perform to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Analyses Perform 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.
Loyalty marketing
– Analyses Perform 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 Analyses Perform 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.
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. Analyses Perform 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
– Analyses Perform 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.
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. Analyses Perform 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. Analyses Perform 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.
Building a culture of innovation
– managers at Analyses Perform 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 Finance & Accounting segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Analyses Perform can use these opportunities to build new business models that can help the communities that Analyses Perform operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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. Analyses Perform can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Soluciones Mexicanas S.A. de C.V. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Soluciones Mexicanas S.A. de C.V. 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 Analyses Perform business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Analyses Perform is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Analyses Perform 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Analyses Perform can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Analyses Perform 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.
Regulatory challenges
– Analyses Perform 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 Finance & Accounting industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Analyses Perform 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 Analyses Perform.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Analyses Perform 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.
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. Analyses Perform 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.
Technology acceleration in Forth Industrial Revolution
– Analyses Perform has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Analyses Perform 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.
High dependence on third party suppliers
– Analyses Perform 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Analyses Perform 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 Soluciones Mexicanas S.A. de C.V. .
Weighted SWOT Analysis of Soluciones Mexicanas S.A. de C.V. 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 Soluciones Mexicanas S.A. de C.V. 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 Soluciones Mexicanas S.A. de C.V. 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 Soluciones Mexicanas S.A. de C.V. 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 Soluciones Mexicanas S.A. de C.V. 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 Analyses Perform needs to make to build a sustainable competitive advantage.
