A senior manager in a U.S. manufacturing firm must make a recommendation about whether to move 57 labor-intensive jobs from the existing California plant to a new facility in a Mexican maquiladora. The Mexican opportunity would require deciding the mode of entry (subcontracting, shelter operator, or wholly owned subsidiary) and location (border or interior).
Authors :: Paul W. Beamish, Jaechul Jung, Joyce Miller
Swot Analysis of "Huxley Maquiladora" written by Paul W. Beamish, Jaechul Jung, Joyce Miller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Maquiladora Mexican facing as an external strategic factors. Some of the topics covered in Huxley Maquiladora case study are - Strategic Management Strategies, Emerging markets, Manufacturing and Global Business.
Some of the macro environment factors that can be used to understand the Huxley Maquiladora casestudy better are - – central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing household debt because of falling income levels,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of Huxley Maquiladora
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Huxley Maquiladora case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Maquiladora Mexican, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Maquiladora Mexican 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 Huxley Maquiladora can be done for the following purposes –
1. Strategic planning using facts provided in Huxley Maquiladora case study
2. Improving business portfolio management of Maquiladora Mexican
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 Maquiladora Mexican
Strengths Huxley Maquiladora | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Maquiladora Mexican in Huxley Maquiladora Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Huxley Maquiladora firm has clearly differentiated products in the market place. This has enabled Maquiladora Mexican to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Maquiladora Mexican to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Maquiladora Mexican 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 Huxley Maquiladora HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Maquiladora Mexican 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 Paul W. Beamish, Jaechul Jung, Joyce Miller can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Maquiladora Mexican in the sector have low bargaining power. Huxley Maquiladora has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Maquiladora Mexican to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Maquiladora Mexican has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Maquiladora Mexican 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 brand equity
– Maquiladora Mexican has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Maquiladora Mexican to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Maquiladora Mexican in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Maquiladora Mexican is present in almost all the verticals within the industry. This has provided firm in Huxley Maquiladora 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)
– Maquiladora Mexican 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 Huxley Maquiladora - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Maquiladora Mexican has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Huxley Maquiladora 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.
Ability to recruit top talent
– Maquiladora Mexican is one of the leading recruiters in the industry. Managers in the Huxley Maquiladora are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Maquiladora Mexican
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Maquiladora Mexican does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Huxley Maquiladora | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Huxley Maquiladora are -
Low market penetration in new markets
– Outside its home market of Maquiladora Mexican, firm in the HBR case study Huxley Maquiladora needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Huxley Maquiladora 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 Huxley Maquiladora can leverage the sales team experience to cultivate customer relationships as Maquiladora Mexican is planning to shift buying processes online.
Need for greater diversity
– Maquiladora Mexican 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.
Capital Spending Reduction
– Even during the low interest decade, Maquiladora Mexican 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, Maquiladora Mexican 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 cash cycle compare to competitors
Maquiladora Mexican 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Maquiladora Mexican needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Maquiladora Mexican has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Maquiladora Mexican even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Huxley Maquiladora 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 Maquiladora Mexican has relatively successful track record of launching new products.
Lack of clear differentiation of Maquiladora Mexican products
– To increase the profitability and margins on the products, Maquiladora Mexican needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Huxley Maquiladora, in the dynamic environment Maquiladora Mexican has struggled to respond to the nimble upstart competition. Maquiladora Mexican has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Huxley Maquiladora | 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 Huxley Maquiladora are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Maquiladora Mexican can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Maquiladora Mexican can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Huxley Maquiladora 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.
Creating value in data economy
– The success of analytics program of Maquiladora Mexican has opened avenues for new revenue streams for the organization in the industry. This can help Maquiladora Mexican to build a more holistic ecosystem as suggested in the Huxley Maquiladora case study. Maquiladora Mexican can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Maquiladora Mexican 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.
Using analytics as competitive advantage
– Maquiladora Mexican 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 Huxley Maquiladora - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Maquiladora Mexican to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Maquiladora Mexican 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.
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. Maquiladora Mexican 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. Maquiladora Mexican 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.
Learning at scale
– Online learning technologies has now opened space for Maquiladora Mexican 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Maquiladora Mexican can use these opportunities to build new business models that can help the communities that Maquiladora Mexican operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Maquiladora Mexican 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.
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 Maquiladora Mexican in the consumer business. Now Maquiladora Mexican can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Maquiladora Mexican 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Maquiladora Mexican 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.
Threats Huxley Maquiladora External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Huxley Maquiladora are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Maquiladora Mexican 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 Huxley Maquiladora .
Increasing wage structure of Maquiladora Mexican
– 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 Maquiladora Mexican.
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 Maquiladora Mexican in the Global Business sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Maquiladora Mexican 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.
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. Maquiladora Mexican 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.
Environmental challenges
– Maquiladora Mexican 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. Maquiladora Mexican can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Huxley Maquiladora, Maquiladora Mexican 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 .
Regulatory challenges
– Maquiladora Mexican needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Maquiladora Mexican in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Maquiladora Mexican has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Maquiladora Mexican 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.
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.
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. Maquiladora Mexican 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 Maquiladora Mexican 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 Huxley Maquiladora 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 Huxley Maquiladora 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 Huxley Maquiladora 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 Huxley Maquiladora 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 Huxley Maquiladora 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 Maquiladora Mexican needs to make to build a sustainable competitive advantage.
