Localizing in the Global Village: Local Firms Competing in Global Markets SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Localizing in the Global Village: Local Firms Competing in Global Markets
Local firms can compete with transnational firms if their actions are firmly based in the local culture, and if they move from local strengths while being equipped with an in-depth understanding of global production and consumption dynamics. Three domains where local firms can offer alternatives to standard global products are products grounded in local culture, information goods, and products for similar local conditions and the poor worldwide. Local firms must develop an innovative perspective, a global and local vision, self-crafted rather than transferred and imitated marketing skills and practices, partnerships and alliances, and a supportive political environment. Such firms can successfully travel on their alternative road within the global arena.
Swot Analysis of "Localizing in the Global Village: Local Firms Competing in Global Markets" written by Guliz Ger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Local Firms facing as an external strategic factors. Some of the topics covered in Localizing in the Global Village: Local Firms Competing in Global Markets case study are - Strategic Management Strategies, Marketing, Sales and Global Business.
Some of the macro environment factors that can be used to understand the Localizing in the Global Village: Local Firms Competing in Global Markets casestudy better are - – cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, geopolitical disruptions, supply chains are disrupted by pandemic , increasing energy prices, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
wage bills are increasing, increasing commodity prices, etc
Introduction to SWOT Analysis of Localizing in the Global Village: Local Firms Competing in Global Markets
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Localizing in the Global Village: Local Firms Competing in Global Markets case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Local Firms, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Local Firms 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 Localizing in the Global Village: Local Firms Competing in Global Markets can be done for the following purposes –
1. Strategic planning using facts provided in Localizing in the Global Village: Local Firms Competing in Global Markets case study
2. Improving business portfolio management of Local Firms
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 Local Firms
Strengths Localizing in the Global Village: Local Firms Competing in Global Markets | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Local Firms in Localizing in the Global Village: Local Firms Competing in Global Markets Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Local Firms in the sector have low bargaining power. Localizing in the Global Village: Local Firms Competing in Global Markets has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Local Firms to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Local Firms has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Local Firms 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.
Effective Research and Development (R&D)
– Local Firms 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 Localizing in the Global Village: Local Firms Competing in Global Markets - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Local Firms 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.
Organizational Resilience of Local Firms
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Local Firms does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Local Firms is present in almost all the verticals within the industry. This has provided firm in Localizing in the Global Village: Local Firms Competing in Global Markets 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
– Local Firms has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Localizing in the Global Village: Local Firms Competing in Global Markets 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.
Operational resilience
– The operational resilience strategy in the Localizing in the Global Village: Local Firms Competing in Global Markets 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
– Localizing in the Global Village: Local Firms Competing in Global Markets firm has clearly differentiated products in the market place. This has enabled Local Firms to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Local Firms to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Local Firms 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 Localizing in the Global Village: Local Firms Competing in Global Markets HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Local Firms has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Local Firms to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Global Business field
– Local Firms 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 Local Firms in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Localizing in the Global Village: Local Firms Competing in Global Markets | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Localizing in the Global Village: Local Firms Competing in Global Markets are -
Products dominated business model
– Even though Local Firms has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Localizing in the Global Village: Local Firms Competing in Global Markets should strive to include more intangible value offerings along with its core products and services.
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 Local Firms supply chain. Even after few cautionary changes mentioned in the HBR case study - Localizing in the Global Village: Local Firms Competing in Global Markets, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Local Firms vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Local Firms 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.
Lack of clear differentiation of Local Firms products
– To increase the profitability and margins on the products, Local Firms needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Local Firms has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Localizing in the Global Village: Local Firms Competing in Global Markets 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 Local Firms 's lucrative customers.
Need for greater diversity
– Local Firms 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Localizing in the Global Village: Local Firms Competing in Global Markets 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 Local Firms has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Localizing in the Global Village: Local Firms Competing in Global Markets, in the dynamic environment Local Firms has struggled to respond to the nimble upstart competition. Local Firms 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, Local Firms 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.
No frontier risks strategy
– After analyzing the HBR case study Localizing in the Global Village: Local Firms Competing in Global Markets, 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.
Opportunities Localizing in the Global Village: Local Firms Competing in Global Markets | 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 Localizing in the Global Village: Local Firms Competing in Global Markets are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Local Firms can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Local Firms can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Local Firms 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.
Learning at scale
– Online learning technologies has now opened space for Local Firms 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.
Creating value in data economy
– The success of analytics program of Local Firms has opened avenues for new revenue streams for the organization in the industry. This can help Local Firms to build a more holistic ecosystem as suggested in the Localizing in the Global Village: Local Firms Competing in Global Markets case study. Local Firms can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Local Firms 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 Localizing in the Global Village: Local Firms Competing in Global Markets - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Local Firms to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Local Firms is facing challenges because of the dominance of functional experts in the organization. Localizing in the Global Village: Local Firms Competing in Global Markets 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.
Developing new processes and practices
– Local Firms 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.
Leveraging digital technologies
– Local Firms 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Local Firms can use these opportunities to build new business models that can help the communities that Local Firms operates in. Secondly it can use opportunities from government spending in Global Business sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Local Firms 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, Localizing in the Global Village: Local Firms Competing in Global Markets, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Local Firms 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 Local Firms to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Local Firms 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.
Buying journey improvements
– Local Firms can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Localizing in the Global Village: Local Firms Competing in Global Markets 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.
Threats Localizing in the Global Village: Local Firms Competing in Global Markets External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Localizing in the Global Village: Local Firms Competing in Global Markets are -
Stagnating economy with rate increase
– Local Firms 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.
Shortening product life cycle
– it is one of the major threat that Local Firms 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, Local Firms 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 Localizing in the Global Village: Local Firms Competing in Global Markets .
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. Local Firms can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Local Firms 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.
Increasing wage structure of Local Firms
– 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 Local Firms.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Local Firms 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.
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 Local Firms business can come under increasing regulations regarding data privacy, data security, etc.
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. Local Firms needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Local Firms 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.
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. Local Firms will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Local Firms has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Local Firms 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 Local Firms in the Global Business sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Localizing in the Global Village: Local Firms Competing in Global Markets 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 Localizing in the Global Village: Local Firms Competing in Global Markets 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 Localizing in the Global Village: Local Firms Competing in Global Markets 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 Localizing in the Global Village: Local Firms Competing in Global Markets 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 Localizing in the Global Village: Local Firms Competing in Global Markets 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 Local Firms needs to make to build a sustainable competitive advantage.
