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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , wage bills are increasing, there is backlash against globalization, central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, 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 -
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.
Highly skilled collaborators
– Uncertainty Suppliers 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 Strategies to Cope with Regulatory Uncertainty in the Auto Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Global Business field
– Uncertainty Suppliers 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 Uncertainty Suppliers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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.
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.
High brand equity
– Uncertainty Suppliers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Uncertainty Suppliers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Learning organization
- Uncertainty Suppliers 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 Uncertainty Suppliers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Strategies to Cope with Regulatory Uncertainty in the Auto Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Ability to recruit top talent
– Uncertainty Suppliers is one of the leading recruiters in the industry. Managers in the Strategies to Cope with Regulatory Uncertainty in the Auto Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Sandra Rothenberg, John E. Ettlie suggests that, Uncertainty Suppliers 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Strategies to Cope with Regulatory Uncertainty in the Auto Industry, it seems that the employees of Uncertainty Suppliers don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Strategies to Cope with Regulatory Uncertainty in the Auto Industry 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 Uncertainty Suppliers has relatively successful track record of launching new products.
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.
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.
Interest costs
– Compare to the competition, Uncertainty Suppliers 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 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.
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.
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.
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 -
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.
Developing new processes and practices
– Uncertainty Suppliers can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Uncertainty Suppliers 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 Uncertainty Suppliers to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Uncertainty Suppliers has opened avenues for new revenue streams for the organization in the industry. This can help Uncertainty Suppliers to build a more holistic ecosystem as suggested in the Strategies to Cope with Regulatory Uncertainty in the Auto Industry case study. Uncertainty Suppliers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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.
Building a culture of innovation
– managers at Uncertainty Suppliers 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Uncertainty Suppliers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
Shortening product life cycle
– it is one of the major threat that Uncertainty Suppliers is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 .
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Uncertainty Suppliers 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
– 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.
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.
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.
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.
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. Uncertainty Suppliers can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Strategies to Cope with Regulatory Uncertainty in the Auto Industry, Uncertainty Suppliers 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 .
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.