3P Turbo - Cross Border Investment in Brazil SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of 3P Turbo - Cross Border Investment in Brazil
Faced with uncompetitive regulation, the founder of 3P Turbo, Jason Starks, was contemplating setting up a facility to manufacture automobile turbochargers in Brazil. At that time, Brazil was experiencing huge political turmoil, resulting from the Petrobras scandal that involved prominent business and political leaders, and the impeachment of the country's president, Dilma Rousseff. It was also hit with the worst recession in two decades, exacerbated by low commodity prices and the slow-down of the Chinese economy. Jason had engaged with a consultant to gather some revenue and cost projections for this cross border investment to see if it would create value and make financial sense. More importantly, he needed to access the economic and political risks of Brazil and its automobile industry, and determine if the timing was right to enter the Brazilian market.
Swot Analysis of "3P Turbo - Cross Border Investment in Brazil" written by Lena Chua Booth, Roy C. Nelson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that 3p Brazil facing as an external strategic factors. Some of the topics covered in 3P Turbo - Cross Border Investment in Brazil case study are - Strategic Management Strategies, Financial management, International business and Finance & Accounting.
Some of the macro environment factors that can be used to understand the 3P Turbo - Cross Border Investment in Brazil casestudy better are - – there is increasing trade war between United States & China, geopolitical disruptions, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of 3P Turbo - Cross Border Investment in Brazil
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in 3P Turbo - Cross Border Investment in Brazil case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the 3p Brazil, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which 3p Brazil 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 3P Turbo - Cross Border Investment in Brazil can be done for the following purposes –
1. Strategic planning using facts provided in 3P Turbo - Cross Border Investment in Brazil case study
2. Improving business portfolio management of 3p Brazil
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 3p Brazil
Strengths 3P Turbo - Cross Border Investment in Brazil | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of 3p Brazil in 3P Turbo - Cross Border Investment in Brazil Harvard Business Review case study are -
Learning organization
- 3p Brazil 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 3p Brazil is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in 3P Turbo - Cross Border Investment in Brazil Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– 3p Brazil is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that 3p Brazil 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 Finance & Accounting industry
– 3P Turbo - Cross Border Investment in Brazil firm has clearly differentiated products in the market place. This has enabled 3p Brazil to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped 3p Brazil to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of 3p Brazil in the sector have low bargaining power. 3P Turbo - Cross Border Investment in Brazil has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps 3p Brazil to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– 3p Brazil 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 3P Turbo - Cross Border Investment in Brazil HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of 3p Brazil in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– 3p Brazil 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 Lena Chua Booth, Roy C. Nelson 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.
Cross disciplinary teams
– Horizontal connected teams at the 3p Brazil 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.
Innovation driven organization
– 3p Brazil is one of the most innovative firm in sector. Manager in 3P Turbo - Cross Border Investment in Brazil Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– 3p Brazil is present in almost all the verticals within the industry. This has provided firm in 3P Turbo - Cross Border Investment in Brazil 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.
Successful track record of launching new products
– 3p Brazil has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. 3p Brazil 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.
Weaknesses 3P Turbo - Cross Border Investment in Brazil | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 3P Turbo - Cross Border Investment in Brazil are -
Increasing silos among functional specialists
– The organizational structure of 3p Brazil is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. 3p Brazil needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help 3p Brazil to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
3p Brazil 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, Lena Chua Booth, Roy C. Nelson suggests that, 3p Brazil 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.
No frontier risks strategy
– After analyzing the HBR case study 3P Turbo - Cross Border Investment in Brazil, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though 3p Brazil 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 - 3P Turbo - Cross Border Investment in Brazil should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at 3p Brazil 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.
High operating costs
– Compare to the competitors, firm in the HBR case study 3P Turbo - Cross Border Investment in Brazil 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 3p Brazil 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, 3p Brazil 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, 3p Brazil 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study 3P Turbo - Cross Border Investment in Brazil, in the dynamic environment 3p Brazil has struggled to respond to the nimble upstart competition. 3p Brazil has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study 3P Turbo - Cross Border Investment in Brazil, it seems that the employees of 3p Brazil 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.
Opportunities 3P Turbo - Cross Border Investment in Brazil | 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 3P Turbo - Cross Border Investment in Brazil are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects 3p Brazil can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for 3p Brazil 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 3p Brazil to hire the very best people irrespective of their geographical location.
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 3p Brazil 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.
Developing new processes and practices
– 3p Brazil 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.
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. 3p Brazil can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– 3p Brazil 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.
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. 3p Brazil 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. 3p Brazil 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, 3p Brazil 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.
Loyalty marketing
– 3p Brazil 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for 3p Brazil 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.
Using analytics as competitive advantage
– 3p Brazil 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 3P Turbo - Cross Border Investment in Brazil - to build a competitive advantage using analytics. The analytics driven competitive advantage can help 3p Brazil to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. 3p Brazil can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help 3p Brazil to increase its market reach. 3p Brazil 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.
Threats 3P Turbo - Cross Border Investment in Brazil External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study 3P Turbo - Cross Border Investment in Brazil are -
Stagnating economy with rate increase
– 3p Brazil 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.
Environmental challenges
– 3p Brazil 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. 3p Brazil can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Regulatory challenges
– 3p Brazil 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.
Consumer confidence and its impact on 3p Brazil 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.
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 3p Brazil.
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 3p Brazil in the Finance & Accounting sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents 3p Brazil with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 3p Brazil business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study 3P Turbo - Cross Border Investment in Brazil, 3p Brazil may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
Shortening product life cycle
– it is one of the major threat that 3p Brazil is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. 3p Brazil needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
Weighted SWOT Analysis of 3P Turbo - Cross Border Investment in Brazil 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 3P Turbo - Cross Border Investment in Brazil 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 3P Turbo - Cross Border Investment in Brazil 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 3P Turbo - Cross Border Investment in Brazil 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 3P Turbo - Cross Border Investment in Brazil 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 3p Brazil needs to make to build a sustainable competitive advantage.