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, increasing government debt because of Covid-19 spendings, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, there is backlash against globalization, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, technology disruption, 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 -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Mexican Inflows digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mexican Inflows has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
Cross disciplinary teams
– Horizontal connected teams at the Mexican Inflows 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.
Analytics focus
– Mexican Inflows 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 Huw Pill 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.
Strong track record of project management
– Mexican Inflows is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Mexican Inflows 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.
Slow decision making process
– As mentioned earlier in the report, Mexican Inflows 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. Mexican Inflows 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 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Mexico (C): Reform and Crisis--1987-95, in the dynamic environment Mexican Inflows has struggled to respond to the nimble upstart competition. Mexican Inflows has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Mexican Inflows 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Mexican Inflows 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.
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 -
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.
Learning at scale
– Online learning technologies has now opened space for Mexican Inflows 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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mexican Inflows in the consumer business. Now Mexican Inflows can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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. Mexican Inflows can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mexican Inflows 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, Mexico (C): Reform and Crisis--1987-95, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Mexican Inflows can develop new processes and procedures in Global Business 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.
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.
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.
Buying journey improvements
– Mexican Inflows can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mexico (C): Reform and Crisis--1987-95 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.
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.
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 -
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 Mexican Inflows in the Global Business sector and impact the bottomline of the organization.
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.
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. Mexican Inflows 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, 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 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.
Shortening product life cycle
– it is one of the major threat that Mexican Inflows is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Mexican Inflows 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.
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.
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.
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.
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.
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.
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.
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.
