Chery Automobile: Vying for a Piece of the American Pie (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Chery Automobile: Vying for a Piece of the American Pie (B)
This case finds Chery after the collapse of its alliance with Chrysler. For Chrysler it meant losing one of its most promising routes to building a competitive small-car lineup for consumers who were pinched at the pump by rising gas prices. For Chery, it meant losing Chrysler's technical ability, quality, and regulatory ratings consistent with U.S. and Western European markets. Students place themselves in the shoes of Chery executives as the company goes about creating a new strategy to tap into the U.S. and European markets.
Swot Analysis of "Chery Automobile: Vying for a Piece of the American Pie (B)" written by includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chery Chrysler facing as an external strategic factors. Some of the topics covered in Chery Automobile: Vying for a Piece of the American Pie (B) case study are - Strategic Management Strategies, Marketing, Strategy and Global Business.
Some of the macro environment factors that can be used to understand the Chery Automobile: Vying for a Piece of the American Pie (B) casestudy better are - – digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, increasing commodity prices, cloud computing is disrupting traditional business models, technology disruption,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Chery Automobile: Vying for a Piece of the American Pie (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chery Automobile: Vying for a Piece of the American Pie (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chery Chrysler, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chery Chrysler 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 Chery Automobile: Vying for a Piece of the American Pie (B) can be done for the following purposes –
1. Strategic planning using facts provided in Chery Automobile: Vying for a Piece of the American Pie (B) case study
2. Improving business portfolio management of Chery Chrysler
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 Chery Chrysler
Strengths Chery Automobile: Vying for a Piece of the American Pie (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chery Chrysler in Chery Automobile: Vying for a Piece of the American Pie (B) Harvard Business Review case study are -
Successful track record of launching new products
– Chery Chrysler has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chery Chrysler 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.
Strong track record of project management
– Chery Chrysler 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 Chery Chrysler 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.
Analytics focus
– Chery Chrysler 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 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
- Chery Chrysler 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 Chery Chrysler is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Chery Automobile: Vying for a Piece of the American Pie (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Global Business industry
– Chery Automobile: Vying for a Piece of the American Pie (B) firm has clearly differentiated products in the market place. This has enabled Chery Chrysler to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Chery Chrysler to invest into research and development (R&D) and innovation.
Organizational Resilience of Chery Chrysler
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Chery Chrysler does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Chery Automobile: Vying for a Piece of the American Pie (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.
Ability to recruit top talent
– Chery Chrysler is one of the leading recruiters in the industry. Managers in the Chery Automobile: Vying for a Piece of the American Pie (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Global Business field
– Chery Chrysler 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 Chery Chrysler in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Chery Chrysler in the sector have low bargaining power. Chery Automobile: Vying for a Piece of the American Pie (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chery Chrysler to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Chery Chrysler has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Chery Automobile: Vying for a Piece of the American Pie (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.
Weaknesses Chery Automobile: Vying for a Piece of the American Pie (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chery Automobile: Vying for a Piece of the American Pie (B) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Chery Automobile: Vying for a Piece of the American Pie (B), in the dynamic environment Chery Chrysler has struggled to respond to the nimble upstart competition. Chery Chrysler has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Chery Chrysler 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 Chery Chrysler products
– To increase the profitability and margins on the products, Chery Chrysler needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Chery Automobile: Vying for a Piece of the American Pie (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 Chery Automobile: Vying for a Piece of the American Pie (B) can leverage the sales team experience to cultivate customer relationships as Chery Chrysler is planning to shift buying processes online.
High cash cycle compare to competitors
Chery Chrysler 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 Chery Automobile: Vying for a Piece of the American Pie (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 Chery Chrysler has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Chery Automobile: Vying for a Piece of the American Pie (B), is just above the industry average. Chery Chrysler 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.
Products dominated business model
– Even though Chery Chrysler has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Chery Automobile: Vying for a Piece of the American Pie (B) should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Chery Automobile: Vying for a Piece of the American Pie (B) HBR case study mentions - Chery Chrysler 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 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 Chery Chrysler supply chain. Even after few cautionary changes mentioned in the HBR case study - Chery Automobile: Vying for a Piece of the American Pie (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chery Chrysler vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Chery Automobile: Vying for a Piece of the American Pie (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 Chery Chrysler 's lucrative customers.
Opportunities Chery Automobile: Vying for a Piece of the American Pie (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 Chery Automobile: Vying for a Piece of the American Pie (B) are -
Building a culture of innovation
– managers at Chery Chrysler 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.
Creating value in data economy
– The success of analytics program of Chery Chrysler has opened avenues for new revenue streams for the organization in the industry. This can help Chery Chrysler to build a more holistic ecosystem as suggested in the Chery Automobile: Vying for a Piece of the American Pie (B) case study. Chery Chrysler can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Chery Chrysler in the consumer business. Now Chery Chrysler can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chery Chrysler can use these opportunities to build new business models that can help the communities that Chery Chrysler operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Chery Chrysler 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. Chery Chrysler can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Chery Chrysler 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 Chery Chrysler to increase its market reach. Chery Chrysler 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chery Chrysler 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 Chery Chrysler to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Chery Chrysler 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.
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. Chery Chrysler 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. Chery Chrysler 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.
Loyalty marketing
– Chery Chrysler 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chery Chrysler in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Threats Chery Automobile: Vying for a Piece of the American Pie (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chery Automobile: Vying for a Piece of the American Pie (B) are -
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. Chery Chrysler 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.
High dependence on third party suppliers
– Chery Chrysler 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.
Environmental challenges
– Chery Chrysler 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. Chery Chrysler can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Stagnating economy with rate increase
– Chery Chrysler 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
– Chery Chrysler 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Chery Automobile: Vying for a Piece of the American Pie (B), Chery Chrysler 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 .
Increasing wage structure of Chery Chrysler
– 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 Chery Chrysler.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chery Chrysler 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 Chery Automobile: Vying for a Piece of the American Pie (B) .
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 Chery Chrysler business can come under increasing regulations regarding data privacy, data security, 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chery Chrysler 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 Chery Chrysler with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Chery Chrysler 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.
Weighted SWOT Analysis of Chery Automobile: Vying for a Piece of the American Pie (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 Chery Automobile: Vying for a Piece of the American Pie (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 Chery Automobile: Vying for a Piece of the American Pie (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 Chery Automobile: Vying for a Piece of the American Pie (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 Chery Automobile: Vying for a Piece of the American Pie (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 Chery Chrysler needs to make to build a sustainable competitive advantage.
