Driven by the 2009 global economic crisis, Dacia Romania designed and built the Dacia Duster sport utility vehicle (SUV) to be the ideal SUV at an affordable price. After the successful introductions of the cheapest modern sedan on the international market in 2004 and among the cheapest modern seven-seaters in 2006, Dacia planned to introduce what it hoped would become the cheapest modern SUV on the international market. The main challenges Dacia was facing in 2009 were not only how to sell the car to existing customers and how to conduct an extensive public communication campaign in order to convince other drivers to change their cars for the cheaper, more efficient Dacia SUV that was going to be available in spring 2010.
Swot Analysis of "Dacia Duster SUV" written by Marina Apaydin, Hantulie Oana Nicoleta includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dacia Suv facing as an external strategic factors. Some of the topics covered in Dacia Duster SUV case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Dacia Duster SUV casestudy better are - – supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, technology disruption, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, wage bills are increasing,
geopolitical disruptions, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dacia Duster SUV case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dacia Suv, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dacia Suv 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 Dacia Duster SUV can be done for the following purposes –
1. Strategic planning using facts provided in Dacia Duster SUV case study
2. Improving business portfolio management of Dacia Suv
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 Dacia Suv
Strengths Dacia Duster SUV | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dacia Suv in Dacia Duster SUV Harvard Business Review case study are -
Learning organization
- Dacia Suv 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 Dacia Suv is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dacia Duster SUV Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Dacia Suv is one of the leading recruiters in the industry. Managers in the Dacia Duster SUV are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Dacia Suv in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Dacia Suv is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Global Business field
– Dacia Suv 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 Dacia Suv in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Global Business industry
– Dacia Duster SUV firm has clearly differentiated products in the market place. This has enabled Dacia Suv to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Dacia Suv to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Dacia Suv has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dacia Suv 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.
High switching costs
– The high switching costs that Dacia Suv 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.
Innovation driven organization
– Dacia Suv is one of the most innovative firm in sector. Manager in Dacia Duster SUV Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Dacia Suv 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 Dacia Duster SUV - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Dacia Suv in the sector have low bargaining power. Dacia Duster SUV has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dacia Suv to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Dacia Suv 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 Dacia Duster SUV HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Dacia Duster SUV | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dacia Duster SUV are -
Skills based hiring
– The stress on hiring functional specialists at Dacia Suv 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.
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 Dacia Suv supply chain. Even after few cautionary changes mentioned in the HBR case study - Dacia Duster SUV, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dacia Suv vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Dacia Duster SUV, in the dynamic environment Dacia Suv has struggled to respond to the nimble upstart competition. Dacia Suv has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Dacia Duster SUV 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 Dacia Duster SUV can leverage the sales team experience to cultivate customer relationships as Dacia Suv is planning to shift buying processes online.
High cash cycle compare to competitors
Dacia Suv 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 operating costs
– Compare to the competitors, firm in the HBR case study Dacia Duster SUV 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 Dacia Suv 's lucrative customers.
Slow to strategic competitive environment developments
– As Dacia Duster SUV HBR case study mentions - Dacia Suv 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.
Products dominated business model
– Even though Dacia Suv 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 - Dacia Duster SUV should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Dacia Suv 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.
Interest costs
– Compare to the competition, Dacia Suv 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.
Need for greater diversity
– Dacia Suv 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.
Opportunities Dacia Duster SUV | 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 Dacia Duster SUV are -
Creating value in data economy
– The success of analytics program of Dacia Suv has opened avenues for new revenue streams for the organization in the industry. This can help Dacia Suv to build a more holistic ecosystem as suggested in the Dacia Duster SUV case study. Dacia Suv can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Dacia Suv to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Dacia Suv 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.
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. Dacia Suv can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Dacia Suv in the consumer business. Now Dacia Suv can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Dacia Suv 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 Dacia Duster SUV - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dacia Suv to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Dacia Suv 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. Dacia Suv 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.
Better consumer reach
– The expansion of the 5G network will help Dacia Suv to increase its market reach. Dacia Suv 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 Dacia Suv 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 Dacia Suv to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dacia Suv can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Dacia Suv 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dacia Suv 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dacia Suv can use these opportunities to build new business models that can help the communities that Dacia Suv operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Dacia Duster SUV External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dacia Duster SUV are -
High dependence on third party suppliers
– Dacia Suv 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dacia Suv 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.
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. Dacia Suv needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Regulatory challenges
– Dacia Suv 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.
Technology acceleration in Forth Industrial Revolution
– Dacia Suv has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Dacia Suv 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dacia Suv with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Dacia Suv.
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 Dacia Suv in the Global Business sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Dacia Suv 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.
Shortening product life cycle
– it is one of the major threat that Dacia Suv is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Dacia Duster SUV, Dacia Suv 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 .
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 Dacia Suv business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Dacia Suv
– 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 Dacia Suv.
Weighted SWOT Analysis of Dacia Duster SUV 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 Dacia Duster SUV 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 Dacia Duster SUV 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 Dacia Duster SUV 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 Dacia Duster SUV 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 Dacia Suv needs to make to build a sustainable competitive advantage.
