Mekong Corporation and the Vietnam Motor Vehicle Industry (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Mekong Corporation and the Vietnam Motor Vehicle Industry (B)
At the time of the Mekong Corporation (Mekong) and the Vietnam Motor Vehicle Industry (A) case, product 9A96H002, some analysts felt that the Vietnamese automotive market was about to expand substantially. By 2007, the industry's capacity had increased enormously to nearly 150,000. However, the domestic sales had only expanded to approximately 40,000, and exports were negligible. This (B) case examines the government's interventionist policies that stimulated the expansion of production capacity while restraining vehicle sales. A key element was the continuation of very high import tariffs and other taxes that maintained a protected market for domestic manufacturers. In this context, Mekong continued to operate successfully. This case encourages students to consider the appropriate role of government in stimulating economic development, as well as appropriate corporate strategy in a protected market.
Swot Analysis of "Mekong Corporation and the Vietnam Motor Vehicle Industry (B)" written by David W. Conklin, Danielle Cadieux includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mekong Vehicle facing as an external strategic factors. Some of the topics covered in Mekong Corporation and the Vietnam Motor Vehicle Industry (B) case study are - Strategic Management Strategies, Globalization and Global Business.
Some of the macro environment factors that can be used to understand the Mekong Corporation and the Vietnam Motor Vehicle Industry (B) casestudy better are - – increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Mekong Corporation and the Vietnam Motor Vehicle Industry (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mekong Corporation and the Vietnam Motor Vehicle Industry (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mekong Vehicle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mekong Vehicle 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) can be done for the following purposes –
1. Strategic planning using facts provided in Mekong Corporation and the Vietnam Motor Vehicle Industry (B) case study
2. Improving business portfolio management of Mekong Vehicle
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 Mekong Vehicle
Strengths Mekong Corporation and the Vietnam Motor Vehicle Industry (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mekong Vehicle in Mekong Corporation and the Vietnam Motor Vehicle Industry (B) Harvard Business Review case study are -
Ability to lead change in Global Business field
– Mekong Vehicle 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 Mekong Vehicle in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Mekong Vehicle digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mekong Vehicle 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.
Diverse revenue streams
– Mekong Vehicle is present in almost all the verticals within the industry. This has provided firm in Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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.
Effective Research and Development (R&D)
– Mekong Vehicle 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Mekong Vehicle is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Mekong Vehicle 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.
Cross disciplinary teams
– Horizontal connected teams at the Mekong Vehicle 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.
Training and development
– Mekong Vehicle has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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.
Sustainable margins compare to other players in Global Business industry
– Mekong Corporation and the Vietnam Motor Vehicle Industry (B) firm has clearly differentiated products in the market place. This has enabled Mekong Vehicle to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Mekong Vehicle to invest into research and development (R&D) and innovation.
Analytics focus
– Mekong Vehicle 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.
Learning organization
- Mekong Vehicle 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 Mekong Vehicle is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mekong Corporation and the Vietnam Motor Vehicle Industry (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Mekong Corporation and the Vietnam Motor Vehicle Industry (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mekong Corporation and the Vietnam Motor Vehicle Industry (B) are -
Interest costs
– Compare to the competition, Mekong Vehicle 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.
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 Mekong Vehicle supply chain. Even after few cautionary changes mentioned in the HBR case study - Mekong Corporation and the Vietnam Motor Vehicle Industry (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mekong Vehicle vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Mekong Vehicle 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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 Mekong Vehicle has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Mekong Vehicle, firm in the HBR case study Mekong Corporation and the Vietnam Motor Vehicle Industry (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Mekong Vehicle 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.
Lack of clear differentiation of Mekong Vehicle products
– To increase the profitability and margins on the products, Mekong Vehicle needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Mekong Corporation and the Vietnam Motor Vehicle Industry (B) HBR case study mentions - Mekong Vehicle 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 bargaining power of channel partners
– Because of the regulatory requirements, David W. Conklin, Danielle Cadieux suggests that, Mekong Vehicle 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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 Mekong Vehicle 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) can leverage the sales team experience to cultivate customer relationships as Mekong Vehicle is planning to shift buying processes online.
Opportunities Mekong Corporation and the Vietnam Motor Vehicle Industry (B) | 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) are -
Manufacturing automation
– Mekong Vehicle 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.
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 Mekong Vehicle in the consumer business. Now Mekong Vehicle can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Mekong Vehicle 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.
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. Mekong Vehicle 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. Mekong Vehicle 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mekong Vehicle 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 Mekong Vehicle to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Mekong Vehicle 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mekong Vehicle can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Mekong Vehicle can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Mekong Vehicle 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.
Better consumer reach
– The expansion of the 5G network will help Mekong Vehicle to increase its market reach. Mekong Vehicle 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.
Buying journey improvements
– Mekong Vehicle can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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.
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. Mekong Vehicle can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mekong Vehicle can use these opportunities to build new business models that can help the communities that Mekong Vehicle operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Mekong Corporation and the Vietnam Motor Vehicle Industry (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mekong Corporation and the Vietnam Motor Vehicle Industry (B) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mekong Vehicle 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) .
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 Mekong Vehicle in the Global Business sector and impact the bottomline of the organization.
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.
Increasing wage structure of Mekong Vehicle
– 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 Mekong Vehicle.
Shortening product life cycle
– it is one of the major threat that Mekong Vehicle is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Mekong Vehicle 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.
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 Mekong Vehicle.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mekong Vehicle 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.
Environmental challenges
– Mekong Vehicle 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. Mekong Vehicle can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Mekong Vehicle business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mekong Corporation and the Vietnam Motor Vehicle Industry (B), Mekong Vehicle 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 .
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. Mekong Vehicle can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Mekong Vehicle 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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 Mekong Corporation and the Vietnam Motor Vehicle Industry (B) 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 Mekong Vehicle needs to make to build a sustainable competitive advantage.
