Case Study Description of ASIMCO Technologies: 2005
In April 2005, the chairman of ASIMCO Technologies, a company headquartered in China and supplying automotive components to both Chinese and global clients, was trying to decide on his company's reaction to the Chinese government's latest regulations on auto emissions. Guo-san (National Standards III) was to take effect on August 1, 2008. By that date, automakers would not be allowed to supply the Chinese market with non-Guo-san-compliant products. ASIMCO's major diesel engine customers had already sent requests for upgraded engine components to ASIMCO as well as other suppliers. While three technologies seemed to provide the Chinese market with a solution, divergent views existed among the management team as to where ASIMCO should focus to enhance the fuel systems that it supplied. The case can be used in an international marketing course (in sessions on product strategy in developing market or customer relations in industrial marketing).
Authors :: Xi Liu, Taehoo Kim, Liang Liu, Guangyu Nie
Swot Analysis of "ASIMCO Technologies: 2005" written by Xi Liu, Taehoo Kim, Liang Liu, Guangyu Nie includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Asimco Guo facing as an external strategic factors. Some of the topics covered in ASIMCO Technologies: 2005 case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the ASIMCO Technologies: 2005 casestudy better are - – increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of ASIMCO Technologies: 2005
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ASIMCO Technologies: 2005 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Asimco Guo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Asimco Guo 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 ASIMCO Technologies: 2005 can be done for the following purposes –
1. Strategic planning using facts provided in ASIMCO Technologies: 2005 case study
2. Improving business portfolio management of Asimco Guo
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 Asimco Guo
Strengths ASIMCO Technologies: 2005 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Asimco Guo in ASIMCO Technologies: 2005 Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the ASIMCO Technologies: 2005 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.
Ability to lead change in Global Business field
– Asimco Guo is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Asimco Guo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Asimco Guo is present in almost all the verticals within the industry. This has provided firm in ASIMCO Technologies: 2005 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)
– Asimco Guo 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 ASIMCO Technologies: 2005 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Asimco Guo 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 Xi Liu, Taehoo Kim, Liang Liu, Guangyu Nie 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.
Training and development
– Asimco Guo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ASIMCO Technologies: 2005 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.
Superior customer experience
– The customer experience strategy of Asimco Guo in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Asimco Guo 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 Asimco Guo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ASIMCO Technologies: 2005 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Global Business industry
– ASIMCO Technologies: 2005 firm has clearly differentiated products in the market place. This has enabled Asimco Guo to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Asimco Guo to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Asimco Guo 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Asimco Guo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Asimco Guo 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.
Successful track record of launching new products
– Asimco Guo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Asimco Guo 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 ASIMCO Technologies: 2005 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ASIMCO Technologies: 2005 are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Asimco Guo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ASIMCO Technologies: 2005 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 cash cycle compare to competitors
Asimco Guo has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ASIMCO Technologies: 2005, is just above the industry average. Asimco Guo 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.
No frontier risks strategy
– After analyzing the HBR case study ASIMCO Technologies: 2005, 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.
Lack of clear differentiation of Asimco Guo products
– To increase the profitability and margins on the products, Asimco Guo 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 ASIMCO Technologies: 2005 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 Asimco Guo has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study ASIMCO Technologies: 2005 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 ASIMCO Technologies: 2005 can leverage the sales team experience to cultivate customer relationships as Asimco Guo is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Asimco Guo, firm in the HBR case study ASIMCO Technologies: 2005 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Asimco Guo supply chain. Even after few cautionary changes mentioned in the HBR case study - ASIMCO Technologies: 2005, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Asimco Guo vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Asimco Guo 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 - ASIMCO Technologies: 2005 should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Asimco Guo 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.
Opportunities ASIMCO Technologies: 2005 | 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 ASIMCO Technologies: 2005 are -
Building a culture of innovation
– managers at Asimco Guo 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Asimco Guo is facing challenges because of the dominance of functional experts in the organization. ASIMCO Technologies: 2005 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Asimco Guo 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.
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 Asimco Guo 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.
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 Asimco Guo in the consumer business. Now Asimco Guo can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Asimco Guo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Asimco Guo can use these opportunities to build new business models that can help the communities that Asimco Guo operates in. Secondly it can use opportunities from government spending in Global Business sector.
Developing new processes and practices
– Asimco Guo 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Asimco Guo 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, ASIMCO Technologies: 2005, 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 Asimco Guo 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 Asimco Guo to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Asimco Guo can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Better consumer reach
– The expansion of the 5G network will help Asimco Guo to increase its market reach. Asimco Guo 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 Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Asimco Guo 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. Asimco Guo 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.
Threats ASIMCO Technologies: 2005 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ASIMCO Technologies: 2005 are -
Environmental challenges
– Asimco Guo 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. Asimco Guo can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Asimco Guo is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Asimco Guo 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 ASIMCO Technologies: 2005 .
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 Asimco Guo in the Global Business sector and impact the bottomline of the organization.
Consumer confidence and its impact on Asimco Guo 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 acceleration in Forth Industrial Revolution
– Asimco Guo has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Asimco Guo 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.
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. Asimco Guo needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Asimco Guo.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Asimco Guo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Asimco Guo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Asimco Guo business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ASIMCO Technologies: 2005, Asimco Guo 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 .
Weighted SWOT Analysis of ASIMCO Technologies: 2005 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 ASIMCO Technologies: 2005 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 ASIMCO Technologies: 2005 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 ASIMCO Technologies: 2005 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 ASIMCO Technologies: 2005 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 Asimco Guo needs to make to build a sustainable competitive advantage.