Arvin Exhaust Thailand: Building An Asian Supply Base SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Arvin Exhaust Thailand: Building An Asian Supply Base
A U.S. automotive supplier follows a major customer to Asia, and forms a joint venture with a Thai company to build and operate a new manufacturing plant. Key parts are also sourced from the Thai partner's existing plant. The Asian currency crisis causes devaluation of the Thai currency as well as problems for the joint venture, requiring the restructuring of the joint venture and the resourcing of parts from another company. Issues in the case include the recovery of tooling and equipment from the joint-venture partner and cost analysis to determine the best sourcing alternative. An optional Excel template is available for use with this case.
Authors :: Edward W. Davis, John W. Wehrenberg, Sandon Moore
Swot Analysis of "Arvin Exhaust Thailand: Building An Asian Supply Base" written by Edward W. Davis, John W. Wehrenberg, Sandon Moore includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Thai Joint facing as an external strategic factors. Some of the topics covered in Arvin Exhaust Thailand: Building An Asian Supply Base case study are - Strategic Management Strategies, Sales, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the Arvin Exhaust Thailand: Building An Asian Supply Base casestudy better are - – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, technology disruption, geopolitical disruptions,
challanges to central banks by blockchain based private currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of Arvin Exhaust Thailand: Building An Asian Supply Base
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Arvin Exhaust Thailand: Building An Asian Supply Base case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Thai Joint, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Thai Joint 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 Arvin Exhaust Thailand: Building An Asian Supply Base can be done for the following purposes –
1. Strategic planning using facts provided in Arvin Exhaust Thailand: Building An Asian Supply Base case study
2. Improving business portfolio management of Thai Joint
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 Thai Joint
Strengths Arvin Exhaust Thailand: Building An Asian Supply Base | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Thai Joint in Arvin Exhaust Thailand: Building An Asian Supply Base Harvard Business Review case study are -
High brand equity
– Thai Joint has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Thai Joint to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Arvin Exhaust Thailand: Building An Asian Supply Base 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
- Thai Joint 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 Thai Joint is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Arvin Exhaust Thailand: Building An Asian Supply Base Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Global Business industry
– Arvin Exhaust Thailand: Building An Asian Supply Base firm has clearly differentiated products in the market place. This has enabled Thai Joint to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Thai Joint to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Thai Joint is present in almost all the verticals within the industry. This has provided firm in Arvin Exhaust Thailand: Building An Asian Supply Base 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.
Training and development
– Thai Joint has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Arvin Exhaust Thailand: Building An Asian Supply Base 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.
Low bargaining power of suppliers
– Suppliers of Thai Joint in the sector have low bargaining power. Arvin Exhaust Thailand: Building An Asian Supply Base has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Thai Joint to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Thai Joint 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 Thai Joint in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Thai Joint 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 Arvin Exhaust Thailand: Building An Asian Supply Base HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Thai Joint has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Thai Joint 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.
Superior customer experience
– The customer experience strategy of Thai Joint in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Thai Joint is one of the leading recruiters in the industry. Managers in the Arvin Exhaust Thailand: Building An Asian Supply Base 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 Arvin Exhaust Thailand: Building An Asian Supply Base | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Arvin Exhaust Thailand: Building An Asian Supply Base are -
Lack of clear differentiation of Thai Joint products
– To increase the profitability and margins on the products, Thai Joint 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, Thai Joint is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Arvin Exhaust Thailand: Building An Asian Supply Base 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 Arvin Exhaust Thailand: Building An Asian Supply Base, in the dynamic environment Thai Joint has struggled to respond to the nimble upstart competition. Thai Joint has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Thai Joint has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Arvin Exhaust Thailand: Building An Asian Supply Base 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 Thai Joint 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Thai Joint 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. Thai Joint 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.
Capital Spending Reduction
– Even during the low interest decade, Thai Joint 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Arvin Exhaust Thailand: Building An Asian Supply Base, is just above the industry average. Thai Joint 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.
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 Thai Joint supply chain. Even after few cautionary changes mentioned in the HBR case study - Arvin Exhaust Thailand: Building An Asian Supply Base, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Thai Joint vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Thai Joint 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Arvin Exhaust Thailand: Building An Asian Supply Base 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 Thai Joint has relatively successful track record of launching new products.
Opportunities Arvin Exhaust Thailand: Building An Asian Supply Base | 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 Arvin Exhaust Thailand: Building An Asian Supply Base are -
Leveraging digital technologies
– Thai Joint 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.
Building a culture of innovation
– managers at Thai Joint 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.
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 Thai Joint 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Thai Joint is facing challenges because of the dominance of functional experts in the organization. Arvin Exhaust Thailand: Building An Asian Supply Base 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Thai Joint can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Thai Joint 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, Arvin Exhaust Thailand: Building An Asian Supply Base, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Thai Joint in the consumer business. Now Thai Joint can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Thai Joint 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.
Creating value in data economy
– The success of analytics program of Thai Joint has opened avenues for new revenue streams for the organization in the industry. This can help Thai Joint to build a more holistic ecosystem as suggested in the Arvin Exhaust Thailand: Building An Asian Supply Base case study. Thai Joint can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Thai Joint can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Thai Joint 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 Thai Joint to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Thai Joint can use these opportunities to build new business models that can help the communities that Thai Joint operates in. Secondly it can use opportunities from government spending in Global Business sector.
Loyalty marketing
– Thai Joint 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.
Threats Arvin Exhaust Thailand: Building An Asian Supply Base External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Arvin Exhaust Thailand: Building An Asian Supply Base are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Thai Joint with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Thai Joint
– 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 Thai Joint.
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. Thai Joint can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Thai Joint 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Arvin Exhaust Thailand: Building An Asian Supply Base, Thai Joint 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 .
High dependence on third party suppliers
– Thai Joint 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.
Consumer confidence and its impact on Thai Joint 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.
Technology acceleration in Forth Industrial Revolution
– Thai Joint has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Thai Joint 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.
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. Thai Joint 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.
Regulatory challenges
– Thai Joint 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.
Stagnating economy with rate increase
– Thai Joint 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.
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 Thai Joint in the Global Business sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Thai Joint is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Arvin Exhaust Thailand: Building An Asian Supply Base 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 Arvin Exhaust Thailand: Building An Asian Supply Base 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 Arvin Exhaust Thailand: Building An Asian Supply Base 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 Arvin Exhaust Thailand: Building An Asian Supply Base 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 Arvin Exhaust Thailand: Building An Asian Supply Base 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 Thai Joint needs to make to build a sustainable competitive advantage.
