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 - – increasing commodity prices, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
cloud computing is disrupting traditional business models, technology disruption, 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 -
High brand equity
– 3p Brazil has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled 3p Brazil to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– 3p Brazil has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in 3P Turbo - Cross Border Investment in Brazil 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.
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.
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.
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.
Effective Research and Development (R&D)
– 3p Brazil 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 3P Turbo - Cross Border Investment in Brazil - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Ability to recruit top talent
– 3p Brazil is one of the leading recruiters in the industry. Managers in the 3P Turbo - Cross Border Investment in Brazil are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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 -
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, 3p Brazil is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study 3P Turbo - Cross Border Investment in Brazil can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Aligning sales with marketing
– It come across in the case study 3P Turbo - Cross Border Investment in Brazil 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 3P Turbo - Cross Border Investment in Brazil can leverage the sales team experience to cultivate customer relationships as 3p Brazil is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study 3P Turbo - Cross Border Investment in Brazil, is just above the industry average. 3p Brazil needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, 3p Brazil needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Need for greater diversity
– 3p Brazil 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.
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.
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.
Slow to strategic competitive environment developments
– As 3P Turbo - Cross Border Investment in Brazil HBR case study mentions - 3p Brazil takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities 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 -
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, 3p Brazil can use these opportunities to build new business models that can help the communities that 3p Brazil operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Learning at scale
– Online learning technologies has now opened space for 3p Brazil 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.
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.
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.
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.
Leveraging digital technologies
– 3p Brazil 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.
Buying journey improvements
– 3p Brazil can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. 3P Turbo - Cross Border Investment in Brazil 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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, 3p Brazil is facing challenges because of the dominance of functional experts in the organization. 3P Turbo - Cross Border Investment in Brazil case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 -
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 3p Brazil 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.
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.
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.
Increasing wage structure of 3p Brazil
– 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 3p Brazil.
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.
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.
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.
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 .
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.
High dependence on third party suppliers
– 3p Brazil 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.
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.
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.