The New Mission for Multinationals SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The New Mission for Multinationals
Not long ago, many observers worried that ever-expanding multinationals -many of which had revenues exceeding the gross domestic products of smaller countries -were going to take over the world. But as globalization marches onward, powerful local companies are increasingly winning out against multinational competitors. This is especially true in emerging markets, where multinationals are assumed to enjoy superiority and CEOs are counting on growth. In China, the ice cream, laundry detergent and appliance markets provide interesting examples of this phenomenon. Despite the presence of multinationals in these markets, the market-share leaders are local companies. A similar pattern is being repeated in other emerging markets. The authors note, however, that in some cases multinationals have been able to resist the market gains of local competition, whether through first-mover advantages or by acquiring the leading local players and nurturing their local identity and strengths. For decades, multinationals were able to make good returns by acting as efficient global conduits for assets that were difficult to transfer, including intangibles such as product designs, technologies, management systems and company cultures. Transfers within the multinational company were more efficient than obtaining those assets through open-market transactions. However, a number of forces have been eroding that advantage. First, in the drive to reduce costs, established multinationals increasingly focused on activities with the highest returns. This meant that lower-value activities were outsourced and often offshored to emerging economies, creating global markets in which local companies can also source components and services. The result is that once-closed value chains have been opened up, enabling local players to source "plug-and-play"modules that can be combined to create products very similar -and sometimes superior -to those of foreign multinationals. If multinationals are to succeed against local competition in emerging markets, the authors write, they need to move beyond the credo of "integrate globally and adapt locally."They will need to create new advantages in target markets by integrating their businesses with the local commercial networks and the society itself. They will need to help shape local markets, rather than just adapt to them. This is an MIT Sloan Management Review article.
Swot Analysis of "The New Mission for Multinationals" written by Josa F.P. Santos, Peter J. Williamson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Multinationals Local facing as an external strategic factors. Some of the topics covered in The New Mission for Multinationals case study are - Strategic Management Strategies, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the The New Mission for Multinationals casestudy better are - – wage bills are increasing, increasing commodity prices, technology disruption, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of The New Mission for Multinationals
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The New Mission for Multinationals case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Multinationals Local, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Multinationals Local 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 The New Mission for Multinationals can be done for the following purposes –
1. Strategic planning using facts provided in The New Mission for Multinationals case study
2. Improving business portfolio management of Multinationals Local
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 Multinationals Local
Strengths The New Mission for Multinationals | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Multinationals Local in The New Mission for Multinationals Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the The New Mission for Multinationals 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.
Strong track record of project management
– Multinationals Local is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Multinationals Local has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The New Mission for Multinationals 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.
Learning organization
- Multinationals Local 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 Multinationals Local is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The New Mission for Multinationals Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Multinationals Local is one of the leading recruiters in the industry. Managers in the The New Mission for Multinationals are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Multinationals Local is present in almost all the verticals within the industry. This has provided firm in The New Mission for Multinationals 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.
High brand equity
– Multinationals Local has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Multinationals Local to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Multinationals Local in the sector have low bargaining power. The New Mission for Multinationals has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Multinationals Local to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Multinationals Local 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 Multinationals Local in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Multinationals Local is one of the most innovative firm in sector. Manager in The New Mission for Multinationals Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Multinationals Local 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 The New Mission for Multinationals HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Global Business industry
– The New Mission for Multinationals firm has clearly differentiated products in the market place. This has enabled Multinationals Local to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Multinationals Local to invest into research and development (R&D) and innovation.
Weaknesses The New Mission for Multinationals | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The New Mission for Multinationals are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The New Mission for Multinationals, is just above the industry average. Multinationals Local 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Multinationals Local 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.
Products dominated business model
– Even though Multinationals Local 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 - The New Mission for Multinationals should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Multinationals Local 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 operating costs
– Compare to the competitors, firm in the HBR case study The New Mission for Multinationals 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 Multinationals Local 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Multinationals Local is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The New Mission for Multinationals can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Multinationals Local 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The New Mission for Multinationals, in the dynamic environment Multinationals Local has struggled to respond to the nimble upstart competition. Multinationals Local 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 Multinationals Local 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 Multinationals Local supply chain. Even after few cautionary changes mentioned in the HBR case study - The New Mission for Multinationals, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Multinationals Local vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As The New Mission for Multinationals HBR case study mentions - Multinationals Local 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.
Opportunities The New Mission for Multinationals | 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 The New Mission for Multinationals are -
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. Multinationals Local 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. Multinationals Local can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Multinationals Local is facing challenges because of the dominance of functional experts in the organization. The New Mission for Multinationals case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Multinationals Local has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Multinationals Local 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.
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. Multinationals Local 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. Multinationals Local 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.
Buying journey improvements
– Multinationals Local can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The New Mission for Multinationals 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.
Building a culture of innovation
– managers at Multinationals Local 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.
Leveraging digital technologies
– Multinationals Local 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Multinationals Local can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Multinationals Local has opened avenues for new revenue streams for the organization in the industry. This can help Multinationals Local to build a more holistic ecosystem as suggested in the The New Mission for Multinationals case study. Multinationals Local can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Multinationals Local 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.
Learning at scale
– Online learning technologies has now opened space for Multinationals Local 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.
Threats The New Mission for Multinationals External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The New Mission for Multinationals are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Multinationals Local business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Multinationals Local 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Multinationals Local 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.
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. Multinationals Local needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Multinationals Local.
Stagnating economy with rate increase
– Multinationals Local 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
– Multinationals Local 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.
Shortening product life cycle
– it is one of the major threat that Multinationals Local is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Multinationals Local in the Global Business sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Multinationals Local with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Multinationals Local 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.
Weighted SWOT Analysis of The New Mission for Multinationals 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 The New Mission for Multinationals 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 The New Mission for Multinationals 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 The New Mission for Multinationals 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 The New Mission for Multinationals 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 Multinationals Local needs to make to build a sustainable competitive advantage.
