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 - – talent flight as more people leaving formal jobs, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation,
wage bills are increasing, supply chains are disrupted by pandemic , 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 -
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.
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.
Learning organization
- Logistics Usco 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 Logistics Usco is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in USCO Logistics Incorporated: The Mexican Proposition Harvard Business Review case study emphasize – knowledge, initiative, 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.
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.
Highly skilled collaborators
– Logistics Usco 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 USCO Logistics Incorporated: The Mexican Proposition HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Logistics Usco has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Logistics Usco 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.
Superior customer experience
– The customer experience strategy of Logistics Usco in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Logistics Usco is one of the most innovative firm in sector. Manager in USCO Logistics Incorporated: The Mexican Proposition Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Cross disciplinary teams
– Horizontal connected teams at the Logistics Usco 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.
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.
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 -
Need for greater diversity
– Logistics Usco 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.
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 Logistics Usco supply chain. Even after few cautionary changes mentioned in the HBR case study - USCO Logistics Incorporated: The Mexican Proposition, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Logistics Usco vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Logistics Usco has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Logistics Usco is dominated by functional specialists. It is not different from other players in the Global Business segment. Logistics Usco needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Logistics Usco to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Logistics Usco 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 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.
Slow to strategic competitive environment developments
– As USCO Logistics Incorporated: The Mexican Proposition HBR case study mentions - Logistics Usco takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Logistics Usco, firm in the HBR case study USCO Logistics Incorporated: The Mexican Proposition needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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 -
Building a culture of innovation
– managers at Logistics Usco 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, 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Logistics Usco can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Using analytics as competitive advantage
– Logistics Usco 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 USCO Logistics Incorporated: The Mexican Proposition - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Logistics Usco to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Logistics Usco to increase its market reach. Logistics Usco 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Logistics Usco 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 Logistics Usco to hire the very best people irrespective of their geographical location.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Logistics Usco 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.
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 -
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Logistics Usco with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Logistics Usco 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 USCO Logistics Incorporated: The Mexican Proposition .
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.
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.
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 acceleration in Forth Industrial Revolution
– Logistics Usco has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Logistics Usco 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.
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.
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.
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 .
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.
