Case Study Description of USCO Logistics Incorporated: The Mexican Proposition
The vice-president of an American logistics services provider considers establishing this service in Mexico where the logistics market is controlled by the banks and is very underdeveloped. He must decide whether to establish a greenfield operation or enter a joint venture. Issues of target segments and positioning also needed resolution.
Swot Analysis of "USCO Logistics Incorporated: The Mexican Proposition" written by Kenneth G. Hardy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Logistics Usco facing as an external strategic factors. Some of the topics covered in USCO Logistics Incorporated: The Mexican Proposition case study are - Strategic Management Strategies, Market research, Operations management and Global Business.
Some of the macro environment factors that can be used to understand the USCO Logistics Incorporated: The Mexican Proposition casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
technology disruption, increasing energy prices, etc
Introduction to SWOT Analysis of USCO Logistics Incorporated: The Mexican Proposition
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in USCO Logistics Incorporated: The Mexican Proposition case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Logistics Usco, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Logistics Usco 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 USCO Logistics Incorporated: The Mexican Proposition can be done for the following purposes –
1. Strategic planning using facts provided in USCO Logistics Incorporated: The Mexican Proposition case study
2. Improving business portfolio management of Logistics Usco
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 Logistics Usco
Strengths USCO Logistics Incorporated: The Mexican Proposition | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Logistics Usco in USCO Logistics Incorporated: The Mexican Proposition Harvard Business Review case study are -
High switching costs
– The high switching costs that Logistics Usco 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 Logistics Usco digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Logistics Usco 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.
Sustainable margins compare to other players in Global Business industry
– USCO Logistics Incorporated: The Mexican Proposition firm has clearly differentiated products in the market place. This has enabled Logistics Usco to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Logistics Usco to invest into research and development (R&D) and innovation.
Strong track record of project management
– Logistics Usco is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the USCO Logistics Incorporated: The Mexican Proposition 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
– Logistics Usco 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 Logistics Usco in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Logistics Usco in the sector have low bargaining power. USCO Logistics Incorporated: The Mexican Proposition has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Logistics Usco to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Logistics Usco 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 Kenneth G. Hardy 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
– Logistics Usco has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in USCO Logistics Incorporated: The Mexican Proposition 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.
Ability to recruit top talent
– Logistics Usco is one of the leading recruiters in the industry. Managers in the USCO Logistics Incorporated: The Mexican Proposition are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Logistics Usco 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 USCO Logistics Incorporated: The Mexican Proposition - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Logistics Usco has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Logistics Usco to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses USCO Logistics Incorporated: The Mexican Proposition | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of USCO Logistics Incorporated: The Mexican Proposition are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study USCO Logistics Incorporated: The Mexican Proposition, in the dynamic environment Logistics Usco has struggled to respond to the nimble upstart competition. Logistics Usco has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study USCO Logistics Incorporated: The Mexican Proposition, it seems that the employees of Logistics Usco 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.
No frontier risks strategy
– After analyzing the HBR case study USCO Logistics Incorporated: The Mexican Proposition, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Logistics Usco is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study USCO Logistics Incorporated: The Mexican Proposition can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study USCO Logistics Incorporated: The Mexican Proposition 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 USCO Logistics Incorporated: The Mexican Proposition can leverage the sales team experience to cultivate customer relationships as Logistics Usco is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Logistics Usco 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.
Skills based hiring
– The stress on hiring functional specialists at Logistics Usco 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.
Lack of clear differentiation of Logistics Usco products
– To increase the profitability and margins on the products, Logistics Usco needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study USCO Logistics Incorporated: The Mexican Proposition 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 Logistics Usco 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the USCO Logistics Incorporated: The Mexican Proposition 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 Logistics Usco has relatively successful track record of launching new products.
Products dominated business model
– Even though Logistics Usco 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 - USCO Logistics Incorporated: The Mexican Proposition should strive to include more intangible value offerings along with its core products and services.
Opportunities USCO Logistics Incorporated: The Mexican Proposition | 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 USCO Logistics Incorporated: The Mexican Proposition are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Logistics Usco 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, USCO Logistics Incorporated: The Mexican Proposition, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Logistics Usco in the consumer business. Now Logistics Usco can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Logistics Usco is facing challenges because of the dominance of functional experts in the organization. USCO Logistics Incorporated: The Mexican Proposition 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.
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. Logistics Usco 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. Logistics Usco 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Logistics Usco can use these opportunities to build new business models that can help the communities that Logistics Usco operates in. Secondly it can use opportunities from government spending in Global Business sector.
Manufacturing automation
– Logistics Usco 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Logistics Usco 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Logistics Usco 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.
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. Logistics Usco can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Logistics Usco has opened avenues for new revenue streams for the organization in the industry. This can help Logistics Usco to build a more holistic ecosystem as suggested in the USCO Logistics Incorporated: The Mexican Proposition case study. Logistics Usco can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Logistics Usco can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. USCO Logistics Incorporated: The Mexican Proposition 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.
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. Logistics Usco can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Logistics Usco 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.
Threats USCO Logistics Incorporated: The Mexican Proposition External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study USCO Logistics Incorporated: The Mexican Proposition are -
Stagnating economy with rate increase
– Logistics Usco 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.
High dependence on third party suppliers
– Logistics Usco 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.
Regulatory challenges
– Logistics Usco 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Logistics Usco 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.
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. Logistics Usco can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Logistics Usco 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study USCO Logistics Incorporated: The Mexican Proposition, Logistics Usco 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 .
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 Logistics Usco in the Global Business sector and impact the bottomline of the organization.
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.
Environmental challenges
– Logistics Usco 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. Logistics Usco can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Logistics Usco.
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. Logistics Usco needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of Logistics Usco
– 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 Logistics Usco.
Weighted SWOT Analysis of USCO Logistics Incorporated: The Mexican Proposition 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 USCO Logistics Incorporated: The Mexican Proposition 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 USCO Logistics Incorporated: The Mexican Proposition 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 USCO Logistics Incorporated: The Mexican Proposition 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 USCO Logistics Incorporated: The Mexican Proposition 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 Logistics Usco needs to make to build a sustainable competitive advantage.