The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
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Case Study SWOT Analysis Solution
Case Study Description of The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World
The case covers and analyzes the major players in the Electric Car Industry, with a focus on the United States and China. The case looks at start-ups and incumbent automakers, battery makers, retrofitters, utility companies and the government. In 2009, the electric car industry was poised to take a giant leap forward, with start-up companies a step ahead of large automakers. Venture capital firms were pouring hundreds of millions of dollars in promising electric car and Plug-in Hybrid (PHEV) start-ups, while existing companies were pouring billions of dollars into electric car and PHEV research. There were also companies that retrofitted existing cars, turning them into Plug-in Hybrids. The case also examines the role of the U.S. and China's government in promoting the electric car industry by providing grants and loans to electric car and battery makers, as well as giving subsidies for consumers to buy electric cars. At the same time, battery makers were racing to build enough lithium-ion batteries for automobiles to meet the expected demand. Most batteries were developed and manufactured in Asia. The electric car industry also required a vast infrastructure of charging stations in each country to enable electric car and PHEV owners to charge their cars outside their homes. Electricity companies were taking an interest in the industry, and began partnering with automakers to test how extensively electric cars used the grid. The case also explores how internal combustion engine makers were striking back with new engines that were smaller, more fuel efficient and more environmentally friendly.
Swot Analysis of "The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World" written by Robert A. Burgelman, Debra Schifrin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Electric Car facing as an external strategic factors. Some of the topics covered in The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World case study are - Strategic Management Strategies, Sustainability and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World casestudy better are - – wage bills are increasing, there is backlash against globalization, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Electric Car, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Electric Car 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 The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World can be done for the following purposes –
1. Strategic planning using facts provided in The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World case study
2. Improving business portfolio management of Electric Car
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Electric Car
Strengths The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Electric Car in The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World Harvard Business Review case study are -
High brand equity
– Electric Car has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Electric Car to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Electric Car 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 The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Electric Car digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Electric Car 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.
Low bargaining power of suppliers
– Suppliers of Electric Car in the sector have low bargaining power. The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Electric Car to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Electric Car is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Robert A. Burgelman, Debra Schifrin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Innovation & Entrepreneurship field
– Electric Car 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 Electric Car in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Electric Car is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Electric Car has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Electric Car 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.
High switching costs
– The high switching costs that Electric Car 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.
Cross disciplinary teams
– Horizontal connected teams at the Electric Car 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.
Learning organization
- Electric Car 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 Electric Car is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World are -
Slow to strategic competitive environment developments
– As The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World HBR case study mentions - Electric Car takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Electric Car products
– To increase the profitability and margins on the products, Electric Car 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, Electric Car is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World 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 The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World, in the dynamic environment Electric Car has struggled to respond to the nimble upstart competition. Electric Car has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Interest costs
– Compare to the competition, Electric Car 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.
Low market penetration in new markets
– Outside its home market of Electric Car, firm in the HBR case study The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Electric Car 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.
Increasing silos among functional specialists
– The organizational structure of Electric Car is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Electric Car needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Electric Car to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Electric Car 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. Electric Car 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, Electric Car 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.
Opportunities The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World | 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 The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World are -
Building a culture of innovation
– managers at Electric Car 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 Innovation & Entrepreneurship segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Electric Car can use these opportunities to build new business models that can help the communities that Electric Car operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Buying journey improvements
– Electric Car can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World 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.
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. Electric Car can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Electric Car 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, Electric Car is facing challenges because of the dominance of functional experts in the organization. The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Electric Car in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Electric Car 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.
Developing new processes and practices
– Electric Car can develop new processes and procedures in Innovation & Entrepreneurship 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
– Electric Car 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.
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 Electric Car in the consumer business. Now Electric Car can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Electric Car 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 Electric Car has opened avenues for new revenue streams for the organization in the industry. This can help Electric Car to build a more holistic ecosystem as suggested in the The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World case study. Electric Car can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World are -
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. Electric Car 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World, Electric Car may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Consumer confidence and its impact on Electric Car 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.
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 Electric Car 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. Electric Car needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Electric Car 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 The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World .
Regulatory challenges
– Electric Car 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 Innovation & Entrepreneurship industry regulations.
Environmental challenges
– Electric Car 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. Electric Car can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Electric Car.
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 Electric Car in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Increasing wage structure of Electric Car
– 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 Electric Car.
High dependence on third party suppliers
– Electric Car 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.
Shortening product life cycle
– it is one of the major threat that Electric Car is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World 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 The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World 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 The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World 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 The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World 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 The Global Electric Car Industry in 2009: Developments in the U.S., China, and the Rest of the World 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 Electric Car needs to make to build a sustainable competitive advantage.
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