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 - – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , geopolitical disruptions, 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 -
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.
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.
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.
Sustainable margins compare to other players in Global Business industry
– Tata Motors' Integration of Daewoo Commercial Vehicle Company firm has clearly differentiated products in the market place. This has enabled Daewoo Tata to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Daewoo Tata to invest into research and development (R&D) and innovation.
Organizational Resilience of Daewoo Tata
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Daewoo Tata does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Daewoo Tata 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.
High brand equity
– Daewoo Tata has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Daewoo Tata to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Daewoo Tata 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
– 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.
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.
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.
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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tata Motors' Integration of Daewoo Commercial Vehicle Company, in the dynamic environment Daewoo Tata has struggled to respond to the nimble upstart competition. Daewoo Tata has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Tata Motors' Integration of Daewoo Commercial Vehicle Company, 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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Tata Motors' Integration 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 Daewoo Tata 's lucrative customers.
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.
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.
Interest costs
– Compare to the competition, Daewoo Tata 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tata Motors' Integration of Daewoo Commercial Vehicle Company, it seems that the employees of Daewoo Tata 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.
Capital Spending Reduction
– Even during the low interest decade, Daewoo Tata 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.
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 -
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Daewoo Tata 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Daewoo Tata 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Daewoo Tata is facing challenges because of the dominance of functional experts in the organization. Tata Motors' Integration 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.
Manufacturing automation
– Daewoo Tata can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Better consumer reach
– The expansion of the 5G network will help Daewoo Tata to increase its market reach. Daewoo Tata 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daewoo Tata can use these opportunities to build new business models that can help the communities that Daewoo Tata operates in. Secondly it can use opportunities from government spending in Global Business sector.
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.
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.
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 -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daewoo Tata 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' Integration of Daewoo Commercial Vehicle Company .
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.
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.
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.
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. Daewoo Tata needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
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.
Shortening product life cycle
– it is one of the major threat that Daewoo Tata is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.