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 household debt because of falling income levels, central banks are concerned over increasing inflation, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs,
there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, 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 -
Organizational Resilience of Jeep Beijing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Jeep Beijing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Jeep Beijing is one of the most innovative firm in sector. Manager in Beijing Jeep Co. and the WTO Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Low bargaining power of suppliers
– Suppliers of Jeep Beijing in the sector have low bargaining power. Beijing Jeep Co. and the WTO has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jeep Beijing to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Jeep Beijing 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.
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.
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.
Diverse revenue streams
– Jeep Beijing is present in almost all the verticals within the industry. This has provided firm in Beijing Jeep Co. and the WTO 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.
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.
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.
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.
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.
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 -
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.
Slow decision making process
– As mentioned earlier in the report, Jeep Beijing 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. Jeep Beijing 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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael N. Young, Justin Tan suggests that, Jeep Beijing 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.
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.
Need for greater diversity
– Jeep Beijing 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 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.
Capital Spending Reduction
– Even during the low interest decade, Jeep Beijing 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.
No frontier risks strategy
– After analyzing the HBR case study Beijing Jeep Co. and the WTO, 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Beijing Jeep Co. and the WTO 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 Jeep Beijing has relatively successful track record of launching new products.
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 -
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.
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.
Loyalty marketing
– Jeep Beijing 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.
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.
Better consumer reach
– The expansion of the 5G network will help Jeep Beijing to increase its market reach. Jeep Beijing 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.
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. Jeep Beijing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Jeep Beijing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Jeep Beijing 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 Beijing Jeep Co. and the WTO - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jeep Beijing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jeep Beijing is facing challenges because of the dominance of functional experts in the organization. Beijing Jeep Co. and the WTO 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.
Buying journey improvements
– Jeep Beijing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Beijing Jeep Co. and the WTO 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.
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.
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.
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 -
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.
Environmental challenges
– Jeep Beijing 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. Jeep Beijing can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
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.
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 Jeep Beijing business can come under increasing regulations regarding data privacy, data security, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jeep Beijing 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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jeep Beijing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Jeep Beijing will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
