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 - – supply chains are disrupted by pandemic , increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, technology disruption, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, 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 -
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.
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.
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.
Organizational Resilience of 3p Brazil
– The covid-19 pandemic has put organizational resilience at the centre of everthing that 3p Brazil does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the 3P Turbo - Cross Border Investment in Brazil Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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 -
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, 3p Brazil 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. 3p Brazil 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.
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.
Low market penetration in new markets
– Outside its home market of 3p Brazil, firm in the HBR case study 3P Turbo - Cross Border Investment in Brazil 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 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.
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.
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 3p Brazil supply chain. Even after few cautionary changes mentioned in the HBR case study - 3P Turbo - Cross Border Investment in Brazil, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left 3p Brazil vulnerable to further global disruptions in South East Asia.
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 -
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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, 3p Brazil 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, 3P Turbo - Cross Border Investment in Brazil, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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. 3p Brazil can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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. 3p Brazil will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, 3p Brazil 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 3P Turbo - Cross Border Investment in Brazil .
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.
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.
Technology acceleration in Forth Industrial Revolution
– 3p Brazil has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, 3p Brazil 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.
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.
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.
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.
