Localizing in the Global Village: Local Firms Competing in Global Markets SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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 - – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, technology disruption, wage bills are increasing, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, 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 -
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.
Superior customer experience
– The customer experience strategy of Local Firms in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Local Firms is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Local Firms is one of the leading recruiters in the industry. Managers in the Localizing in the Global Village: Local Firms Competing in Global Markets are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Local Firms digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Local Firms 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.
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.
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.
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.
Innovation driven organization
– Local Firms is one of the most innovative firm in sector. Manager in Localizing in the Global Village: Local Firms Competing in Global Markets Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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 -
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Localizing in the Global Village: Local Firms Competing in Global Markets, is just above the industry average. Local Firms 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.
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.
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 cash cycle compare to competitors
Local Firms 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 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.
Low market penetration in new markets
– Outside its home market of Local Firms, firm in the HBR case study Localizing in the Global Village: Local Firms Competing in Global Markets needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Slow decision making process
– As mentioned earlier in the report, Local Firms 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. Local Firms 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.
Increasing silos among functional specialists
– The organizational structure of Local Firms is dominated by functional specialists. It is not different from other players in the Global Business segment. Local Firms needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Local Firms to focus more on services rather than just following the product oriented approach.
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.
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 -
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Local Firms to increase its market reach. Local Firms 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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Local Firms can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Loyalty marketing
– Local Firms 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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Local Firms 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.
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 -
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.
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.
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.
Environmental challenges
– Local Firms 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. Local Firms can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Local Firms business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Localizing in the Global Village: Local Firms Competing in Global Markets, Local Firms 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
– 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.
Consumer confidence and its impact on Local Firms 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.
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.