Tata Motors' Integration of Daewoo Commercial Vehicle Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tata Motors' Integration 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 complements the case "Tata Motors' Acquisition of Daewoo Commercial Vehicles Company, #9B08M094. Commencing from the successful completion of the acquisition of DCVC, this case details the strategic, organizational and operational changes implemented to integrate the two firms. The value of this case is twofold: 1) it demonstrates how firms can effectively integrate an acquired firm, particularly in terms of the wide range of strategic and tactical actions; and 2) it provides an example of a firm that takes an unorthodox approach to integration. Students have an opportunity to evaluate the factors that determine the success of a post-acquisition integration.
Swot Analysis of "Tata Motors' Integration 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 Daewoo Tata facing as an external strategic factors. Some of the topics covered in Tata Motors' Integration 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' Integration of Daewoo Commercial Vehicle Company casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Tata Motors' Integration 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' Integration 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 Daewoo Tata, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daewoo Tata 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' Integration of Daewoo Commercial Vehicle Company can be done for the following purposes –
1. Strategic planning using facts provided in Tata Motors' Integration of Daewoo Commercial Vehicle Company case study
2. Improving business portfolio management of Daewoo Tata
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 Daewoo Tata
Strengths Tata Motors' Integration of Daewoo Commercial Vehicle Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daewoo Tata in Tata Motors' Integration of Daewoo Commercial Vehicle Company Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Daewoo Tata digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daewoo Tata 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.
Effective Research and Development (R&D)
– Daewoo Tata 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' Integration 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.
Diverse revenue streams
– Daewoo Tata is present in almost all the verticals within the industry. This has provided firm in Tata Motors' Integration 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.
Successful track record of launching new products
– Daewoo Tata has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daewoo Tata 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.
Highly skilled collaborators
– Daewoo Tata 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' Integration 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' Integration 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.
Ability to recruit top talent
– Daewoo Tata is one of the leading recruiters in the industry. Managers in the Tata Motors' Integration of Daewoo Commercial Vehicle Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Daewoo Tata in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Daewoo Tata has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tata Motors' Integration 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.
Strong track record of project management
– Daewoo Tata is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Daewoo Tata 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 Meera Harish, Sanjay Singh, Kulwant Singh 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.
Learning organization
- Daewoo Tata 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 Daewoo Tata is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tata Motors' Integration of Daewoo Commercial Vehicle Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Tata Motors' Integration of Daewoo Commercial Vehicle Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tata Motors' Integration 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' Integration 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 Daewoo Tata has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Daewoo Tata has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Daewoo Tata even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Daewoo Tata 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 - Tata Motors' Integration of Daewoo Commercial Vehicle Company should strive to include more intangible value offerings along with its core products and services.
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 Daewoo Tata supply chain. Even after few cautionary changes mentioned in the HBR case study - Tata Motors' Integration of Daewoo Commercial Vehicle Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Daewoo Tata vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Meera Harish, Sanjay Singh, Kulwant Singh suggests that, Daewoo Tata 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.
Need for greater diversity
– Daewoo Tata 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 cash cycle compare to competitors
Daewoo Tata 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.
Skills based hiring
– The stress on hiring functional specialists at Daewoo Tata 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.
Low market penetration in new markets
– Outside its home market of Daewoo Tata, firm in the HBR case study Tata Motors' Integration of Daewoo Commercial Vehicle Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tata Motors' Integration of Daewoo Commercial Vehicle Company, is just above the industry average. Daewoo Tata 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.
Aligning sales with marketing
– It come across in the case study Tata Motors' Integration 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' Integration of Daewoo Commercial Vehicle Company can leverage the sales team experience to cultivate customer relationships as Daewoo Tata is planning to shift buying processes online.
Opportunities Tata Motors' Integration 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' Integration of Daewoo Commercial Vehicle Company are -
Buying journey improvements
– Daewoo Tata can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tata Motors' Integration 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.
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. Daewoo Tata can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Daewoo Tata 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.
Creating value in data economy
– The success of analytics program of Daewoo Tata has opened avenues for new revenue streams for the organization in the industry. This can help Daewoo Tata to build a more holistic ecosystem as suggested in the Tata Motors' Integration of Daewoo Commercial Vehicle Company case study. Daewoo Tata can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Daewoo Tata 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' Integration of Daewoo Commercial Vehicle Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daewoo Tata to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Daewoo Tata in the consumer business. Now Daewoo Tata can target international markets with far fewer capital restrictions requirements than the existing system.
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 Daewoo Tata 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Daewoo Tata can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Daewoo Tata 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.
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. Daewoo Tata can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daewoo Tata 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, Tata Motors' Integration of Daewoo Commercial Vehicle Company, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Daewoo Tata 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.
Leveraging digital technologies
– Daewoo Tata 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.
Threats Tata Motors' Integration 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' Integration of Daewoo Commercial Vehicle Company are -
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 Daewoo Tata business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Daewoo Tata 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. Daewoo Tata can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Daewoo Tata 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.
Regulatory challenges
– Daewoo Tata 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.
Consumer confidence and its impact on Daewoo Tata 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.
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.
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 Daewoo Tata in the Global Business sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Daewoo Tata has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Daewoo Tata 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Daewoo Tata with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Daewoo Tata.
Increasing wage structure of Daewoo Tata
– 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 Daewoo Tata.
Environmental challenges
– Daewoo Tata 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. Daewoo Tata can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Weighted SWOT Analysis of Tata Motors' Integration 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' Integration 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' Integration 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' Integration 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' Integration 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 Daewoo Tata needs to make to build a sustainable competitive advantage.
