Case Study Description of Mexico (C): Reform and Crisis--1987-95
Describes the evolution of the Mexican economy and its relation with the international capital markets in the period leading up to the Peso crisis of December 1994. Emphasizes the role of "Washington consensus" policies in stimulating the inflows, and the inability of the Mexican banking system to intermediate them efficiently.
Swot Analysis of "Mexico (C): Reform and Crisis--1987-95" written by Huw Pill includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mexican Inflows facing as an external strategic factors. Some of the topics covered in Mexico (C): Reform and Crisis--1987-95 case study are - Strategic Management Strategies, Economics, Global strategy, Government, Recession and Global Business.
Some of the macro environment factors that can be used to understand the Mexico (C): Reform and Crisis--1987-95 casestudy better are - – increasing transportation and logistics costs, technology disruption, wage bills are increasing, geopolitical disruptions, increasing commodity prices, there is backlash against globalization, increasing household debt because of falling income levels,
supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Mexico (C): Reform and Crisis--1987-95
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mexico (C): Reform and Crisis--1987-95 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mexican Inflows, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mexican Inflows 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 Mexico (C): Reform and Crisis--1987-95 can be done for the following purposes –
1. Strategic planning using facts provided in Mexico (C): Reform and Crisis--1987-95 case study
2. Improving business portfolio management of Mexican Inflows
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mexican Inflows
Strengths Mexico (C): Reform and Crisis--1987-95 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mexican Inflows in Mexico (C): Reform and Crisis--1987-95 Harvard Business Review case study are -
Ability to recruit top talent
– Mexican Inflows is one of the leading recruiters in the industry. Managers in the Mexico (C): Reform and Crisis--1987-95 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Mexican Inflows has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mexico (C): Reform and Crisis--1987-95 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.
Sustainable margins compare to other players in Global Business industry
– Mexico (C): Reform and Crisis--1987-95 firm has clearly differentiated products in the market place. This has enabled Mexican Inflows to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Mexican Inflows to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Mexican Inflows in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Mexican Inflows in the sector have low bargaining power. Mexico (C): Reform and Crisis--1987-95 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mexican Inflows to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Mexican Inflows 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.
Organizational Resilience of Mexican Inflows
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mexican Inflows does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Mexican Inflows is present in almost all the verticals within the industry. This has provided firm in Mexico (C): Reform and Crisis--1987-95 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.
Effective Research and Development (R&D)
– Mexican Inflows 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 Mexico (C): Reform and Crisis--1987-95 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Mexico (C): Reform and Crisis--1987-95 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.
Innovation driven organization
– Mexican Inflows is one of the most innovative firm in sector. Manager in Mexico (C): Reform and Crisis--1987-95 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Mexican Inflows 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 Mexico (C): Reform and Crisis--1987-95 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Mexico (C): Reform and Crisis--1987-95 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mexico (C): Reform and Crisis--1987-95 are -
Low market penetration in new markets
– Outside its home market of Mexican Inflows, firm in the HBR case study Mexico (C): Reform and Crisis--1987-95 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Mexican Inflows products
– To increase the profitability and margins on the products, Mexican Inflows needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Mexico (C): Reform and Crisis--1987-95, it seems that company is thinking about the frontier risks that can impact Global Business 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.
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 Mexican Inflows supply chain. Even after few cautionary changes mentioned in the HBR case study - Mexico (C): Reform and Crisis--1987-95, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mexican Inflows vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mexico (C): Reform and Crisis--1987-95 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Mexican Inflows has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Mexico (C): Reform and Crisis--1987-95, it seems that the employees of Mexican Inflows 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Mexico (C): Reform and Crisis--1987-95, is just above the industry average. Mexican Inflows 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.
Increasing silos among functional specialists
– The organizational structure of Mexican Inflows is dominated by functional specialists. It is not different from other players in the Global Business segment. Mexican Inflows needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mexican Inflows to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Mexican Inflows 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.
Capital Spending Reduction
– Even during the low interest decade, Mexican Inflows 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 operating costs
– Compare to the competitors, firm in the HBR case study Mexico (C): Reform and Crisis--1987-95 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 Mexican Inflows 's lucrative customers.
Opportunities Mexico (C): Reform and Crisis--1987-95 | 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 Mexico (C): Reform and Crisis--1987-95 are -
Creating value in data economy
– The success of analytics program of Mexican Inflows has opened avenues for new revenue streams for the organization in the industry. This can help Mexican Inflows to build a more holistic ecosystem as suggested in the Mexico (C): Reform and Crisis--1987-95 case study. Mexican Inflows can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mexican Inflows in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mexican Inflows is facing challenges because of the dominance of functional experts in the organization. Mexico (C): Reform and Crisis--1987-95 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.
Using analytics as competitive advantage
– Mexican Inflows 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 Mexico (C): Reform and Crisis--1987-95 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mexican Inflows to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Mexican Inflows 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.
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 Mexican Inflows 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mexican Inflows can use these opportunities to build new business models that can help the communities that Mexican Inflows operates in. Secondly it can use opportunities from government spending in Global Business sector.
Leveraging digital technologies
– Mexican Inflows 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.
Loyalty marketing
– Mexican Inflows 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mexican Inflows 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 Mexican Inflows 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 Global Business industry, but it has also influenced the consumer preferences. Mexican Inflows can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mexican Inflows 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. Mexican Inflows 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 Mexican Inflows 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 Global Business segment.
Threats Mexico (C): Reform and Crisis--1987-95 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mexico (C): Reform and Crisis--1987-95 are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mexico (C): Reform and Crisis--1987-95, Mexican Inflows may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Consumer confidence and its impact on Mexican Inflows 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 Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mexican Inflows can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Mexican Inflows 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. Mexican Inflows can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mexican Inflows in the Global Business industry. The Global Business 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
– Mexican Inflows can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mexican Inflows with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Increasing wage structure of Mexican Inflows
– 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 Mexican Inflows.
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 Mexican Inflows.
Regulatory challenges
– Mexican Inflows 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 Global Business industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mexican Inflows 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 Mexico (C): Reform and Crisis--1987-95 .
Technology acceleration in Forth Industrial Revolution
– Mexican Inflows has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Mexican Inflows needs to keep up with the evolution of technology in the Global Business 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.
Weighted SWOT Analysis of Mexico (C): Reform and Crisis--1987-95 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 Mexico (C): Reform and Crisis--1987-95 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 Mexico (C): Reform and Crisis--1987-95 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 Mexico (C): Reform and Crisis--1987-95 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 Mexico (C): Reform and Crisis--1987-95 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 Mexican Inflows needs to make to build a sustainable competitive advantage.