Tata Motors' Acquisition of Daewoo Commercial Vehicle Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tata Motors' Acquisition of Daewoo Commercial Vehicle Company
In January 2004, the chairman of the India-based Tata Group, announced that the Tata Group would focus its efforts on international expansion to become globally competitive. This largely domestic vehicle manufacturing firm subsequently acquired a leading established South Korean firm, Daewoo Commercial Vehicle Company (DCVC). This case focuses on the background of the firms and the acquisition, and the bidding and acquisition process. It provides information on the interests of the acquirer and target, and how both came to see the value in the acquisition. The Tata Group acquisition presents an uncommon situation of how an Indian firm acquired a firm in South Korea while overcoming a series of cultural and other barriers. An analysis of this case provides the basis for determining what criteria should be considered to guide a successful acquisition. A companion case to Tata Motors' Integration of Daewoo Commercial Vehicle Company, #908M95.
Swot Analysis of "Tata Motors' Acquisition of Daewoo Commercial Vehicle Company" written by Meera Harish, Sanjay Singh, Kulwant Singh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tata Daewoo facing as an external strategic factors. Some of the topics covered in Tata Motors' Acquisition of Daewoo Commercial Vehicle Company case study are - Strategic Management Strategies, International business, Marketing, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the Tata Motors' Acquisition of Daewoo Commercial Vehicle Company casestudy better are - – increasing government debt because of Covid-19 spendings, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, there is increasing trade war between United States & China, wage bills are increasing,
talent flight as more people leaving formal jobs, geopolitical disruptions, etc
Introduction to SWOT Analysis of Tata Motors' Acquisition of Daewoo Commercial Vehicle Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tata Motors' Acquisition of Daewoo Commercial Vehicle Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tata Daewoo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tata Daewoo 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company can be done for the following purposes –
1. Strategic planning using facts provided in Tata Motors' Acquisition of Daewoo Commercial Vehicle Company case study
2. Improving business portfolio management of Tata Daewoo
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 Tata Daewoo
Strengths Tata Motors' Acquisition of Daewoo Commercial Vehicle Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tata Daewoo in Tata Motors' Acquisition of Daewoo Commercial Vehicle Company Harvard Business Review case study are -
Diverse revenue streams
– Tata Daewoo is present in almost all the verticals within the industry. This has provided firm in Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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.
Ability to lead change in Global Business field
– Tata Daewoo 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 Tata Daewoo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Tata Daewoo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tata Daewoo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Tata Daewoo 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Tata Daewoo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tata Daewoo 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.
Cross disciplinary teams
– Horizontal connected teams at the Tata Daewoo 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.
Highly skilled collaborators
– Tata Daewoo 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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
– Tata Daewoo is one of the most innovative firm in sector. Manager in Tata Motors' Acquisition of Daewoo Commercial Vehicle Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Tata Daewoo in the sector have low bargaining power. Tata Motors' Acquisition of Daewoo Commercial Vehicle Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tata Daewoo to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Tata Daewoo in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Tata Daewoo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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.
Weaknesses Tata Motors' Acquisition of Daewoo Commercial Vehicle Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tata Motors' Acquisition of Daewoo Commercial Vehicle Company are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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 Tata Daewoo has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tata Motors' Acquisition of Daewoo Commercial Vehicle Company, in the dynamic environment Tata Daewoo has struggled to respond to the nimble upstart competition. Tata Daewoo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Tata Daewoo is dominated by functional specialists. It is not different from other players in the Global Business segment. Tata Daewoo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tata Daewoo to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Tata Daewoo products
– To increase the profitability and margins on the products, Tata Daewoo needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Tata Daewoo 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.
Aligning sales with marketing
– It come across in the case study Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company can leverage the sales team experience to cultivate customer relationships as Tata Daewoo is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Meera Harish, Sanjay Singh, Kulwant Singh suggests that, Tata Daewoo 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tata Motors' Acquisition of Daewoo Commercial Vehicle Company, is just above the industry average. Tata Daewoo 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.
Interest costs
– Compare to the competition, Tata Daewoo 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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 Tata Daewoo 's lucrative customers.
High cash cycle compare to competitors
Tata Daewoo 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.
Opportunities Tata Motors' Acquisition of Daewoo Commercial Vehicle Company | 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company are -
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. Tata Daewoo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Tata Daewoo 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.
Manufacturing automation
– Tata Daewoo 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tata Daewoo 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 Tata Daewoo to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tata Daewoo is facing challenges because of the dominance of functional experts in the organization. Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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
– Tata Daewoo 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tata Daewoo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tata Daewoo can use these opportunities to build new business models that can help the communities that Tata Daewoo operates in. Secondly it can use opportunities from government spending in Global Business sector.
Loyalty marketing
– Tata Daewoo 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.
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. Tata Daewoo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Tata Daewoo 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tata Daewoo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Tata Daewoo 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.
Buying journey improvements
– Tata Daewoo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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.
Threats Tata Motors' Acquisition of Daewoo Commercial Vehicle Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tata Motors' Acquisition of Daewoo Commercial Vehicle Company are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tata Daewoo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tata Motors' Acquisition of Daewoo Commercial Vehicle Company, Tata Daewoo 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 .
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. Tata Daewoo 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.
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 Tata Daewoo in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Tata Daewoo
– 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 Tata Daewoo.
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 Tata Daewoo business can come under increasing regulations regarding data privacy, data security, etc.
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. Tata Daewoo needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tata Daewoo 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tata Daewoo 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company .
Environmental challenges
– Tata Daewoo 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. Tata Daewoo can take advantage of this fund but it will also bring new competitors in the Global Business 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.
Shortening product life cycle
– it is one of the major threat that Tata Daewoo is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Tata Daewoo 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.
Weighted SWOT Analysis of Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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 Tata Motors' Acquisition of Daewoo Commercial Vehicle Company 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 Tata Daewoo needs to make to build a sustainable competitive advantage.