Beijing Jeep Co. and the WTO SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Beijing Jeep Co. and the WTO
Beijing Jeep Corp. Ltd. was one of the first joint ventures between an American company, DaimlerChrysler Corp., and a Chinese enterprise, Beijing Automotive Works. Early in its operations, Beijing Jeep was given preferential treatment on tariffs and foreign exchange and had spent many years developing relationships with senior government officials who protected it from import competition. After several years of negotiations, there was an agreement of terms for China to enter into the World Trade Organization. Terms of this agreement called for a steep reduction in tariffs for imported automobiles, which would lower entry barriers to the Chinese automotive industry, thus creating more competition for the company. Tariffs on components imported from the United States would also be reduced, but not enough to offset the flood of imported vehicles into the market. Entry into the World Trade Organization would mean a lot of changes, and Beijing Jeep must determine whether it should continue focusing on the relationships it has built with the government, or approach its joint venture partner for additional support.
Swot Analysis of "Beijing Jeep Co. and the WTO" written by Michael N. Young, Justin Tan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jeep Beijing facing as an external strategic factors. Some of the topics covered in Beijing Jeep Co. and the WTO case study are - Strategic Management Strategies, Globalization, Joint ventures, Manufacturing, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Beijing Jeep Co. and the WTO casestudy better are - – increasing commodity prices, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Beijing Jeep Co. and the WTO
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Beijing Jeep Co. and the WTO case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jeep Beijing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jeep Beijing 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 Beijing Jeep Co. and the WTO can be done for the following purposes –
1. Strategic planning using facts provided in Beijing Jeep Co. and the WTO case study
2. Improving business portfolio management of Jeep Beijing
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 Jeep Beijing
Strengths Beijing Jeep Co. and the WTO | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jeep Beijing in Beijing Jeep Co. and the WTO Harvard Business Review case study are -
High brand equity
– Jeep Beijing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jeep Beijing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Global Business field
– Jeep Beijing 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 Jeep Beijing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Jeep Beijing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jeep Beijing 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.
Training and development
– Jeep Beijing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Beijing Jeep Co. and the WTO 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
– Jeep Beijing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– Beijing Jeep Co. and the WTO firm has clearly differentiated products in the market place. This has enabled Jeep Beijing to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Jeep Beijing to invest into research and development (R&D) and innovation.
Analytics focus
– Jeep Beijing 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 Michael N. Young, Justin Tan 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
- Jeep Beijing 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 Jeep Beijing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Beijing Jeep Co. and the WTO Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Jeep Beijing 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 Beijing Jeep Co. and the WTO - 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 switching costs
– The high switching costs that Jeep Beijing 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.
Highly skilled collaborators
– Jeep Beijing 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 Beijing Jeep Co. and the WTO HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Jeep Beijing is one of the leading recruiters in the industry. Managers in the Beijing Jeep Co. and the WTO are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Beijing Jeep Co. and the WTO | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beijing Jeep Co. and the WTO are -
Slow to strategic competitive environment developments
– As Beijing Jeep Co. and the WTO HBR case study mentions - Jeep Beijing 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.
High cash cycle compare to competitors
Jeep Beijing 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.
Increasing silos among functional specialists
– The organizational structure of Jeep Beijing is dominated by functional specialists. It is not different from other players in the Global Business segment. Jeep Beijing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jeep Beijing to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Jeep Beijing 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Beijing Jeep Co. and the WTO 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 Jeep Beijing 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jeep Beijing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Beijing Jeep Co. and the WTO can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Beijing Jeep Co. and the WTO, is just above the industry average. Jeep Beijing 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.
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 Jeep Beijing supply chain. Even after few cautionary changes mentioned in the HBR case study - Beijing Jeep Co. and the WTO, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jeep Beijing vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Beijing Jeep Co. and the WTO 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 Beijing Jeep Co. and the WTO can leverage the sales team experience to cultivate customer relationships as Jeep Beijing is planning to shift buying processes online.
Interest costs
– Compare to the competition, Jeep Beijing 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Beijing Jeep Co. and the WTO, in the dynamic environment Jeep Beijing has struggled to respond to the nimble upstart competition. Jeep Beijing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Beijing Jeep Co. and the WTO | 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 Beijing Jeep Co. and the WTO are -
Developing new processes and practices
– Jeep Beijing 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.
Creating value in data economy
– The success of analytics program of Jeep Beijing has opened avenues for new revenue streams for the organization in the industry. This can help Jeep Beijing to build a more holistic ecosystem as suggested in the Beijing Jeep Co. and the WTO case study. Jeep Beijing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jeep Beijing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jeep Beijing 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, Beijing Jeep Co. and the WTO, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Jeep Beijing 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.
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 Jeep Beijing in the consumer business. Now Jeep Beijing can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Jeep Beijing 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 Jeep Beijing to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jeep Beijing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Jeep Beijing 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.
Leveraging digital technologies
– Jeep Beijing 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jeep Beijing can use these opportunities to build new business models that can help the communities that Jeep Beijing operates in. Secondly it can use opportunities from government spending in Global Business sector.
Building a culture of innovation
– managers at Jeep Beijing 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.
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. Jeep Beijing 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. Jeep Beijing 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.
Threats Beijing Jeep Co. and the WTO External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Beijing Jeep Co. and the WTO are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jeep Beijing 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 Beijing Jeep Co. and the WTO .
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. Jeep Beijing needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Jeep Beijing 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
– Jeep Beijing 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 Jeep Beijing 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.
Technology acceleration in Forth Industrial Revolution
– Jeep Beijing has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Jeep Beijing 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.
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 Jeep Beijing.
High dependence on third party suppliers
– Jeep Beijing 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.
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. Jeep Beijing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Beijing Jeep Co. and the WTO, Jeep Beijing 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 Jeep Beijing in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Jeep Beijing
– 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 Jeep Beijing.
Shortening product life cycle
– it is one of the major threat that Jeep Beijing is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Beijing Jeep Co. and the WTO 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 Beijing Jeep Co. and the WTO 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 Beijing Jeep Co. and the WTO 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 Beijing Jeep Co. and the WTO 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 Beijing Jeep Co. and the WTO 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 Jeep Beijing needs to make to build a sustainable competitive advantage.