The New Carolina Initiative SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The New Carolina Initiative
The New Carolina Initiative case explores the process of fostering competitiveness in the subnational region, South Carolina, one of the poorest states in the United States. The case has been developed primarily for the use in the course "Microeconomics of Competitiveness", developing the concept of organizations for competitiveness in a subnational region and the elements of constructing an economic strategy. The case also outlines the adopted cluster vision of development for the state and the various task forces created to upgrade the business environment of the state. South Carolina's Council on Competitiveness, New Carolina, is an organization with significant capacity to mobilize regional actors in various task forces and cluster initiatives. Showcasing the complexity and organizational challenges of building a competitiveness initiative, the case emphasizes the importance of engagement from both private and public sector representatives. The case also provides an opportunity to discuss the competitive position of the South Carolina economy in 2011.
Authors :: Michael E. Porter, Jorge Ramirez-Vallejo
Swot Analysis of "The New Carolina Initiative" written by Michael E. Porter, Jorge Ramirez-Vallejo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Carolina Competitiveness facing as an external strategic factors. Some of the topics covered in The New Carolina Initiative case study are - Strategic Management Strategies, Economy, Government, Strategy execution and Global Business.
Some of the macro environment factors that can be used to understand the The New Carolina Initiative casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, talent flight as more people leaving formal jobs, technology disruption, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of The New Carolina Initiative
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The New Carolina Initiative case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Carolina Competitiveness, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Carolina Competitiveness 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 Carolina Initiative can be done for the following purposes –
1. Strategic planning using facts provided in The New Carolina Initiative case study
2. Improving business portfolio management of Carolina Competitiveness
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 Carolina Competitiveness
Strengths The New Carolina Initiative | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Carolina Competitiveness in The New Carolina Initiative Harvard Business Review case study are -
Diverse revenue streams
– Carolina Competitiveness is present in almost all the verticals within the industry. This has provided firm in The New Carolina Initiative 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.
Sustainable margins compare to other players in Global Business industry
– The New Carolina Initiative firm has clearly differentiated products in the market place. This has enabled Carolina Competitiveness to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Carolina Competitiveness to invest into research and development (R&D) and innovation.
Analytics focus
– Carolina Competitiveness 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 Michael E. Porter, Jorge Ramirez-Vallejo 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Carolina Competitiveness digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Carolina Competitiveness has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Carolina Competitiveness has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Carolina Competitiveness 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.
Ability to lead change in Global Business field
– Carolina Competitiveness 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 Carolina Competitiveness in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Carolina Competitiveness has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The New Carolina Initiative 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.
Highly skilled collaborators
– Carolina Competitiveness 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 Carolina Initiative HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Carolina Competitiveness in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the The New Carolina Initiative 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.
Learning organization
- Carolina Competitiveness 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 Carolina Competitiveness is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The New Carolina Initiative Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Carolina Competitiveness has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Carolina Competitiveness to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses The New Carolina Initiative | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The New Carolina Initiative are -
Slow to strategic competitive environment developments
– As The New Carolina Initiative HBR case study mentions - Carolina Competitiveness 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Carolina Competitiveness 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.
Capital Spending Reduction
– Even during the low interest decade, Carolina Competitiveness 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael E. Porter, Jorge Ramirez-Vallejo suggests that, Carolina Competitiveness is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though Carolina Competitiveness 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 Carolina Initiative should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The New Carolina Initiative, is just above the industry average. Carolina Competitiveness 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The New Carolina Initiative, in the dynamic environment Carolina Competitiveness has struggled to respond to the nimble upstart competition. Carolina Competitiveness has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Carolina Competitiveness products
– To increase the profitability and margins on the products, Carolina Competitiveness needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Carolina Competitiveness is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The New Carolina Initiative can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study The New Carolina Initiative 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 The New Carolina Initiative can leverage the sales team experience to cultivate customer relationships as Carolina Competitiveness is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study The New Carolina Initiative 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 Carolina Competitiveness 's lucrative customers.
Opportunities The New Carolina Initiative | 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 Carolina Initiative 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. Carolina Competitiveness can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Carolina Competitiveness 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 The New Carolina Initiative - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Carolina Competitiveness 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 Carolina Competitiveness 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Carolina Competitiveness can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The New Carolina Initiative, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Carolina Competitiveness can use these opportunities to build new business models that can help the communities that Carolina Competitiveness operates in. Secondly it can use opportunities from government spending in Global Business sector.
Leveraging digital technologies
– Carolina Competitiveness 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.
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 Carolina Competitiveness in the consumer business. Now Carolina Competitiveness can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Carolina Competitiveness has opened avenues for new revenue streams for the organization in the industry. This can help Carolina Competitiveness to build a more holistic ecosystem as suggested in the The New Carolina Initiative case study. Carolina Competitiveness can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Carolina Competitiveness to increase its market reach. Carolina Competitiveness 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Carolina Competitiveness 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Carolina Competitiveness can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Carolina Competitiveness 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 Carolina Competitiveness to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Carolina Competitiveness is facing challenges because of the dominance of functional experts in the organization. The New Carolina Initiative 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.
Threats The New Carolina Initiative 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 Carolina Initiative are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The New Carolina Initiative, Carolina Competitiveness 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 .
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 Carolina Competitiveness in the Global Business sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Carolina Competitiveness can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Carolina Competitiveness with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Carolina Competitiveness 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.
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.
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. Carolina Competitiveness 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.
Technology acceleration in Forth Industrial Revolution
– Carolina Competitiveness has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Carolina Competitiveness 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.
Stagnating economy with rate increase
– Carolina Competitiveness 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.
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 Carolina Competitiveness.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Carolina Competitiveness in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Environmental challenges
– Carolina Competitiveness 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. Carolina Competitiveness can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing wage structure of Carolina Competitiveness
– 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 Carolina Competitiveness.
Weighted SWOT Analysis of The New Carolina Initiative 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 Carolina Initiative 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 Carolina Initiative 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 Carolina Initiative 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 Carolina Initiative 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 Carolina Competitiveness needs to make to build a sustainable competitive advantage.