Latvia: Economic Strategy after EU Accession SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Latvia: Economic Strategy after EU Accession
Describes the economic development of Latvia, a small eastern European country on the shores of the Baltic Sea, from regaining independence in 1991 to European Union (EU) accession in 2004 and is set on May 1st, 2004, the day Latvia became an EU member. Latvia had achieved strong growth since regaining independence from the Soviet Union in 1990. Describes Latvia's economic development over this period, discussing the economic policy efforts that have taken place and includes general information on the country, its history and politics, and the business environment that companies faced in 2004. A special focus is the influence that the EU accession process has on the Latvian economy and on economic policy choices in the country. Challenges students to discuss how the environment changes as EU membership is achieved, and which new priorities the country might need to define for its economic policy.
Authors :: Michael E. Porter, Christian H.M. Ketels
Swot Analysis of "Latvia: Economic Strategy after EU Accession" written by Michael E. Porter, Christian H.M. Ketels includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Latvia Eu facing as an external strategic factors. Some of the topics covered in Latvia: Economic Strategy after EU Accession case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Latvia: Economic Strategy after EU Accession casestudy better are - – wage bills are increasing, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Latvia: Economic Strategy after EU Accession
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Latvia: Economic Strategy after EU Accession case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Latvia Eu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Latvia Eu 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 Latvia: Economic Strategy after EU Accession can be done for the following purposes –
1. Strategic planning using facts provided in Latvia: Economic Strategy after EU Accession case study
2. Improving business portfolio management of Latvia Eu
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 Latvia Eu
Strengths Latvia: Economic Strategy after EU Accession | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Latvia Eu in Latvia: Economic Strategy after EU Accession Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Latvia Eu in the sector have low bargaining power. Latvia: Economic Strategy after EU Accession has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Latvia Eu to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Latvia Eu
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Latvia Eu does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Latvia Eu 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.
Ability to recruit top talent
– Latvia Eu is one of the leading recruiters in the industry. Managers in the Latvia: Economic Strategy after EU Accession 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
– Latvia Eu is present in almost all the verticals within the industry. This has provided firm in Latvia: Economic Strategy after EU Accession 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.
Cross disciplinary teams
– Horizontal connected teams at the Latvia Eu are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Latvia Eu 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 Latvia: Economic Strategy after EU Accession - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Latvia Eu has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Latvia: Economic Strategy after EU Accession 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
- Latvia Eu 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 Latvia Eu is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Latvia: Economic Strategy after EU Accession Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Latvia: Economic Strategy after EU Accession 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.
Innovation driven organization
– Latvia Eu is one of the most innovative firm in sector. Manager in Latvia: Economic Strategy after EU Accession 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
– Latvia Eu 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 Latvia: Economic Strategy after EU Accession HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Latvia: Economic Strategy after EU Accession | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Latvia: Economic Strategy after EU Accession are -
Aligning sales with marketing
– It come across in the case study Latvia: Economic Strategy after EU Accession 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 Latvia: Economic Strategy after EU Accession can leverage the sales team experience to cultivate customer relationships as Latvia Eu is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Latvia Eu is dominated by functional specialists. It is not different from other players in the Global Business segment. Latvia Eu needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Latvia Eu to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Latvia Eu 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 Latvia: Economic Strategy after EU Accession, 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael E. Porter, Christian H.M. Ketels suggests that, Latvia Eu 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Latvia Eu 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Latvia: Economic Strategy after EU Accession 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 Latvia Eu has relatively successful track record of launching new products.
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 Latvia Eu supply chain. Even after few cautionary changes mentioned in the HBR case study - Latvia: Economic Strategy after EU Accession, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Latvia Eu vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Latvia Eu 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. Latvia Eu even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Latvia Eu has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Latvia: Economic Strategy after EU Accession, in the dynamic environment Latvia Eu has struggled to respond to the nimble upstart competition. Latvia Eu has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Latvia: Economic Strategy after EU Accession | 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 Latvia: Economic Strategy after EU Accession are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Latvia Eu 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Latvia Eu 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Latvia Eu 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, Latvia: Economic Strategy after EU Accession, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Latvia Eu 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
– Latvia Eu 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.
Loyalty marketing
– Latvia Eu 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 Latvia Eu 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 Latvia Eu to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Latvia Eu is facing challenges because of the dominance of functional experts in the organization. Latvia: Economic Strategy after EU Accession 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.
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 Latvia Eu in the consumer business. Now Latvia Eu 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 Latvia Eu has opened avenues for new revenue streams for the organization in the industry. This can help Latvia Eu to build a more holistic ecosystem as suggested in the Latvia: Economic Strategy after EU Accession case study. Latvia Eu can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Latvia Eu can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Latvia Eu to increase its market reach. Latvia Eu 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.
Learning at scale
– Online learning technologies has now opened space for Latvia Eu 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 Latvia: Economic Strategy after EU Accession External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Latvia: Economic Strategy after EU Accession are -
Increasing wage structure of Latvia Eu
– 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 Latvia Eu.
High dependence on third party suppliers
– Latvia Eu 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.
Stagnating economy with rate increase
– Latvia Eu 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.
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. Latvia Eu 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.
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. Latvia Eu can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Latvia Eu 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 Latvia: Economic Strategy after EU Accession .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Latvia Eu with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Latvia: Economic Strategy after EU Accession, Latvia Eu 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 .
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.
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 Latvia Eu in the Global Business sector and impact the bottomline of the organization.
Regulatory challenges
– Latvia Eu 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.
Technology acceleration in Forth Industrial Revolution
– Latvia Eu has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Latvia Eu 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Latvia Eu 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 Latvia: Economic Strategy after EU Accession 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 Latvia: Economic Strategy after EU Accession 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 Latvia: Economic Strategy after EU Accession 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 Latvia: Economic Strategy after EU Accession 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 Latvia: Economic Strategy after EU Accession 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 Latvia Eu needs to make to build a sustainable competitive advantage.
