Strategies to Cope with Regulatory Uncertainty in the Auto Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Strategies to Cope with Regulatory Uncertainty in the Auto Industry
Automotive assemblers and suppliers have employed a number of different strategies to deal with external uncertainty. These strategies have evolved relatively rapidly of late in part because of changes in the locus of innovation from OEMs to suppliers, changing market conditions, and the future regulations of greenhouse gases. This presents a unique challenge for the industry. Some auto firms have been more effective in dealing with market and regulatory uncertainty due to technology resource integration across platforms and integration between functions on the value added chain from suppliers to retailers.
Swot Analysis of "Strategies to Cope with Regulatory Uncertainty in the Auto Industry" written by Sandra Rothenberg, John E. Ettlie includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Uncertainty Suppliers facing as an external strategic factors. Some of the topics covered in Strategies to Cope with Regulatory Uncertainty in the Auto Industry case study are - Strategic Management Strategies, IT, Managing uncertainty, Mergers & acquisitions, Supply chain, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Strategies to Cope with Regulatory Uncertainty in the Auto Industry casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing transportation and logistics costs, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing commodity prices,
wage bills are increasing, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Strategies to Cope with Regulatory Uncertainty in the Auto Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategies to Cope with Regulatory Uncertainty in the Auto Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Uncertainty Suppliers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Uncertainty Suppliers 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry can be done for the following purposes –
1. Strategic planning using facts provided in Strategies to Cope with Regulatory Uncertainty in the Auto Industry case study
2. Improving business portfolio management of Uncertainty Suppliers
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 Uncertainty Suppliers
Strengths Strategies to Cope with Regulatory Uncertainty in the Auto Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Uncertainty Suppliers in Strategies to Cope with Regulatory Uncertainty in the Auto Industry Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Uncertainty Suppliers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Uncertainty Suppliers 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.
Superior customer experience
– The customer experience strategy of Uncertainty Suppliers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Global Business industry
– Strategies to Cope with Regulatory Uncertainty in the Auto Industry firm has clearly differentiated products in the market place. This has enabled Uncertainty Suppliers to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Uncertainty Suppliers to invest into research and development (R&D) and innovation.
Strong track record of project management
– Uncertainty Suppliers 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
– Uncertainty Suppliers has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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.
Innovation driven organization
– Uncertainty Suppliers is one of the most innovative firm in sector. Manager in Strategies to Cope with Regulatory Uncertainty in the Auto Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Uncertainty Suppliers in the sector have low bargaining power. Strategies to Cope with Regulatory Uncertainty in the Auto Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Uncertainty Suppliers to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Uncertainty Suppliers has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Analytics focus
– Uncertainty Suppliers 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 Sandra Rothenberg, John E. Ettlie 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.
Effective Research and Development (R&D)
– Uncertainty Suppliers 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Uncertainty Suppliers
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Uncertainty Suppliers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Uncertainty Suppliers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Uncertainty Suppliers 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.
Weaknesses Strategies to Cope with Regulatory Uncertainty in the Auto Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategies to Cope with Regulatory Uncertainty in the Auto Industry are -
Need for greater diversity
– Uncertainty Suppliers 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.
No frontier risks strategy
– After analyzing the HBR case study Strategies to Cope with Regulatory Uncertainty in the Auto Industry, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Uncertainty Suppliers 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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 Uncertainty Suppliers 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Uncertainty Suppliers, firm in the HBR case study Strategies to Cope with Regulatory Uncertainty in the Auto Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Uncertainty Suppliers 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. Uncertainty Suppliers 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Uncertainty Suppliers is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Strategies to Cope with Regulatory Uncertainty in the Auto Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Strategies to Cope with Regulatory Uncertainty in the Auto Industry, in the dynamic environment Uncertainty Suppliers has struggled to respond to the nimble upstart competition. Uncertainty Suppliers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Uncertainty Suppliers is dominated by functional specialists. It is not different from other players in the Global Business segment. Uncertainty Suppliers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Uncertainty Suppliers to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Strategies to Cope with Regulatory Uncertainty in the Auto Industry, is just above the industry average. Uncertainty Suppliers 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.
Skills based hiring
– The stress on hiring functional specialists at Uncertainty Suppliers 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.
Opportunities Strategies to Cope with Regulatory Uncertainty in the Auto Industry | 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry are -
Manufacturing automation
– Uncertainty Suppliers 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
– Uncertainty Suppliers 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Uncertainty Suppliers to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Uncertainty Suppliers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Uncertainty Suppliers 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 Uncertainty Suppliers 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.
Buying journey improvements
– Uncertainty Suppliers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Uncertainty Suppliers 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.
Loyalty marketing
– Uncertainty Suppliers 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.
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. Uncertainty Suppliers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Uncertainty Suppliers 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Uncertainty Suppliers 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, Strategies to Cope with Regulatory Uncertainty in the Auto Industry, 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, Uncertainty Suppliers can use these opportunities to build new business models that can help the communities that Uncertainty Suppliers operates in. Secondly it can use opportunities from government spending in Global Business sector.
Better consumer reach
– The expansion of the 5G network will help Uncertainty Suppliers to increase its market reach. Uncertainty Suppliers 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.
Threats Strategies to Cope with Regulatory Uncertainty in the Auto Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategies to Cope with Regulatory Uncertainty in the Auto Industry are -
Consumer confidence and its impact on Uncertainty Suppliers 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Uncertainty Suppliers 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry .
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 Uncertainty Suppliers business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Uncertainty Suppliers 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.
Regulatory challenges
– Uncertainty Suppliers 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.
Environmental challenges
– Uncertainty Suppliers 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. Uncertainty Suppliers can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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. Uncertainty Suppliers 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Uncertainty Suppliers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Uncertainty Suppliers needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of Uncertainty Suppliers
– 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 Uncertainty Suppliers.
Technology acceleration in Forth Industrial Revolution
– Uncertainty Suppliers has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Uncertainty Suppliers 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.
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 Uncertainty Suppliers in the Global Business sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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 Uncertainty Suppliers needs to make to build a sustainable competitive advantage.
