Geely's Acquisition of Volvo: Challenges and Opportunities SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Geely's Acquisition of Volvo: Challenges and Opportunities
For more than a decade, the government of China had sought to develop an automotive industry. The government's initial steps involved the creation of joint ventures in which government-owned firms became partners of foreign privately owned corporations. Most of these joint ventures were extremely successful financially. However, ongoing differences in management preferences created a continual tension within the joint ventures. Of particular concern was a desire of the government of China to ensure that its new automotive industry would adopt the latest advances in technologies. This subject of technology transfer, and how the government of China could best support it, became a central issue in China's automotive industry. From the perspective of the government of China, Geely's acquisition of Volvo would be a major step in achieving technology transfer on an ongoing basis. Geely's China operations would be able to quickly and easily adopt Volvo's cutting-edge safety features and production operations. From Geely's perspective, the Volvo acquisition would provide it with a new set of luxury vehicles for sale in China that would fill a gap in Geely's automotive lineup. Nevertheless, Geely faced the challenge that Ford had continually lost money in Volvo. How to reverse these losses would become a major challenge for Geely.
Swot Analysis of "Geely's Acquisition of Volvo: Challenges and Opportunities" written by David W. Conklin, Danielle Cadieux includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Geely's Volvo facing as an external strategic factors. Some of the topics covered in Geely's Acquisition of Volvo: Challenges and Opportunities case study are - Strategic Management Strategies, Government and Global Business.
Some of the macro environment factors that can be used to understand the Geely's Acquisition of Volvo: Challenges and Opportunities casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Geely's Acquisition of Volvo: Challenges and Opportunities
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Geely's Acquisition of Volvo: Challenges and Opportunities case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Geely's Volvo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Geely's Volvo 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 Geely's Acquisition of Volvo: Challenges and Opportunities can be done for the following purposes –
1. Strategic planning using facts provided in Geely's Acquisition of Volvo: Challenges and Opportunities case study
2. Improving business portfolio management of Geely's Volvo
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 Geely's Volvo
Strengths Geely's Acquisition of Volvo: Challenges and Opportunities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Geely's Volvo in Geely's Acquisition of Volvo: Challenges and Opportunities Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Geely's Acquisition of Volvo: Challenges and Opportunities firm has clearly differentiated products in the market place. This has enabled Geely's Volvo to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Geely's Volvo to invest into research and development (R&D) and innovation.
Strong track record of project management
– Geely's Volvo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Geely's Volvo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Geely's Volvo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Geely's Volvo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Geely's Volvo 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.
Ability to recruit top talent
– Geely's Volvo is one of the leading recruiters in the industry. Managers in the Geely's Acquisition of Volvo: Challenges and Opportunities are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Geely's Acquisition of Volvo: Challenges and Opportunities 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.
Effective Research and Development (R&D)
– Geely's Volvo 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 Geely's Acquisition of Volvo: Challenges and Opportunities - 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 brand equity
– Geely's Volvo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Geely's Volvo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Geely's Volvo 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 David W. Conklin, Danielle Cadieux 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.
Highly skilled collaborators
– Geely's Volvo 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 Geely's Acquisition of Volvo: Challenges and Opportunities HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Geely's Volvo 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 Geely's Volvo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Geely's Acquisition of Volvo: Challenges and Opportunities Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Geely's Volvo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Geely's Volvo 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.
Weaknesses Geely's Acquisition of Volvo: Challenges and Opportunities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Geely's Acquisition of Volvo: Challenges and Opportunities are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Geely's Volvo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Geely's Acquisition of Volvo: Challenges and Opportunities can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Geely's Acquisition of Volvo: Challenges and Opportunities 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 Geely's Volvo 's lucrative customers.
Need for greater diversity
– Geely's Volvo 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.
Aligning sales with marketing
– It come across in the case study Geely's Acquisition of Volvo: Challenges and Opportunities 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 Geely's Acquisition of Volvo: Challenges and Opportunities can leverage the sales team experience to cultivate customer relationships as Geely's Volvo is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Geely's Acquisition of Volvo: Challenges and Opportunities, in the dynamic environment Geely's Volvo has struggled to respond to the nimble upstart competition. Geely's Volvo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Geely's Acquisition of Volvo: Challenges and Opportunities 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 Geely's Volvo has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Geely's Volvo 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.
Capital Spending Reduction
– Even during the low interest decade, Geely's Volvo 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.
Slow to strategic competitive environment developments
– As Geely's Acquisition of Volvo: Challenges and Opportunities HBR case study mentions - Geely's Volvo takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Geely's Volvo, firm in the HBR case study Geely's Acquisition of Volvo: Challenges and Opportunities needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, David W. Conklin, Danielle Cadieux suggests that, Geely's Volvo 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.
Opportunities Geely's Acquisition of Volvo: Challenges and Opportunities | 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 Geely's Acquisition of Volvo: Challenges and Opportunities are -
Buying journey improvements
– Geely's Volvo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Geely's Acquisition of Volvo: Challenges and Opportunities 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.
Learning at scale
– Online learning technologies has now opened space for Geely's Volvo 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.
Loyalty marketing
– Geely's Volvo 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.
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 Geely's Volvo 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.
Creating value in data economy
– The success of analytics program of Geely's Volvo has opened avenues for new revenue streams for the organization in the industry. This can help Geely's Volvo to build a more holistic ecosystem as suggested in the Geely's Acquisition of Volvo: Challenges and Opportunities case study. Geely's Volvo 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
– Geely's Volvo 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 Geely's Acquisition of Volvo: Challenges and Opportunities - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Geely's Volvo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Geely's Volvo can use these opportunities to build new business models that can help the communities that Geely's Volvo operates in. Secondly it can use opportunities from government spending in Global Business sector.
Better consumer reach
– The expansion of the 5G network will help Geely's Volvo to increase its market reach. Geely's Volvo 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.
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. Geely's Volvo 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. Geely's Volvo 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.
Leveraging digital technologies
– Geely's Volvo 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Geely's Volvo 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, Geely's Acquisition of Volvo: Challenges and Opportunities, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Geely's Volvo 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 Geely's Volvo to hire the very best people irrespective of their geographical location.
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 Geely's Volvo in the consumer business. Now Geely's Volvo can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Geely's Acquisition of Volvo: Challenges and Opportunities External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Geely's Acquisition of Volvo: Challenges and Opportunities are -
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.
Technology acceleration in Forth Industrial Revolution
– Geely's Volvo has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Geely's Volvo 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Geely's Acquisition of Volvo: Challenges and Opportunities, Geely's Volvo 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Geely's Volvo 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Geely's Volvo 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. Geely's Volvo 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.
Stagnating economy with rate increase
– Geely's Volvo 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.
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. Geely's Volvo needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Consumer confidence and its impact on Geely's Volvo 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.
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 Geely's Volvo.
Environmental challenges
– Geely's Volvo 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. Geely's Volvo can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Geely's Volvo 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.
Weighted SWOT Analysis of Geely's Acquisition of Volvo: Challenges and Opportunities 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 Geely's Acquisition of Volvo: Challenges and Opportunities 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 Geely's Acquisition of Volvo: Challenges and Opportunities 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 Geely's Acquisition of Volvo: Challenges and Opportunities 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 Geely's Acquisition of Volvo: Challenges and Opportunities 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 Geely's Volvo needs to make to build a sustainable competitive advantage.
