Moonka Auto: Growth Strategies Of A Honda Dealership SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Moonka Auto: Growth Strategies Of A Honda Dealership
In February 2016, the owner of Moonka Automobile was struggling with the strategic decision he needed to make to increase revenue and improve profitability. Moonka Automobile had been in business as a full-service, two-wheeler dealership for eight years in India, had a strong customer base, a good reputation, and a positive relationship with the manufacturer, Honda. But, competition was increasing and business growth was slowing. The owner identified various alternatives for growth, but given the changes taking place in the two-wheeler market, the owner's limited resources, and his excellent relationship with Honda, he needed to make some difficult decisions. Atul Arun Pathak is affiliated with XLRI-Xavier School of Management. Gyanesh Mishra is affiliated with XLRI-Xavier School of Management.
Swot Analysis of "Moonka Auto: Growth Strategies Of A Honda Dealership" written by Atul Arun Pathak, Gyanesh Mishra includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Moonka Honda facing as an external strategic factors. Some of the topics covered in Moonka Auto: Growth Strategies Of A Honda Dealership case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Moonka Auto: Growth Strategies Of A Honda Dealership casestudy better are - – cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, there is backlash against globalization, geopolitical disruptions, challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Moonka Auto: Growth Strategies Of A Honda Dealership
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Moonka Auto: Growth Strategies Of A Honda Dealership case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Moonka Honda, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Moonka Honda 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 Moonka Auto: Growth Strategies Of A Honda Dealership can be done for the following purposes –
1. Strategic planning using facts provided in Moonka Auto: Growth Strategies Of A Honda Dealership case study
2. Improving business portfolio management of Moonka Honda
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 Moonka Honda
Strengths Moonka Auto: Growth Strategies Of A Honda Dealership | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Moonka Honda in Moonka Auto: Growth Strategies Of A Honda Dealership Harvard Business Review case study are -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Moonka Honda digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Moonka Honda 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.
Analytics focus
– Moonka Honda 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 Atul Arun Pathak, Gyanesh Mishra 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.
Successful track record of launching new products
– Moonka Honda has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Moonka Honda 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.
Learning organization
- Moonka Honda 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 Moonka Honda is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Moonka Auto: Growth Strategies Of A Honda Dealership Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Moonka Honda is present in almost all the verticals within the industry. This has provided firm in Moonka Auto: Growth Strategies Of A Honda Dealership case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the Moonka Honda 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.
Training and development
– Moonka Honda has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Moonka Auto: Growth Strategies Of A Honda Dealership 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.
High switching costs
– The high switching costs that Moonka Honda 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.
High brand equity
– Moonka Honda has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Moonka Honda to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Moonka Honda in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Innovation & Entrepreneurship field
– Moonka Honda 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 Moonka Honda in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Moonka Honda in the sector have low bargaining power. Moonka Auto: Growth Strategies Of A Honda Dealership has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Moonka Honda to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Moonka Auto: Growth Strategies Of A Honda Dealership | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Moonka Auto: Growth Strategies Of A Honda Dealership are -
Increasing silos among functional specialists
– The organizational structure of Moonka Honda is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Moonka Honda needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Moonka Honda to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Moonka Auto: Growth Strategies Of A Honda Dealership, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Moonka Honda needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Moonka Auto: Growth Strategies Of A Honda Dealership, in the dynamic environment Moonka Honda has struggled to respond to the nimble upstart competition. Moonka Honda has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Moonka Honda, firm in the HBR case study Moonka Auto: Growth Strategies Of A Honda Dealership needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Moonka Honda 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. Moonka Honda even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Moonka Honda 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.
Capital Spending Reduction
– Even during the low interest decade, Moonka Honda 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.
Interest costs
– Compare to the competition, Moonka Honda 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.
Aligning sales with marketing
– It come across in the case study Moonka Auto: Growth Strategies Of A Honda Dealership that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Moonka Auto: Growth Strategies Of A Honda Dealership can leverage the sales team experience to cultivate customer relationships as Moonka Honda is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Moonka Auto: Growth Strategies Of A Honda Dealership 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 Moonka Honda 's lucrative customers.
Opportunities Moonka Auto: Growth Strategies Of A Honda Dealership | 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 Moonka Auto: Growth Strategies Of A Honda Dealership are -
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 Moonka Honda 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Moonka Honda 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.
Buying journey improvements
– Moonka Honda can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Moonka Auto: Growth Strategies Of A Honda Dealership 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.
Using analytics as competitive advantage
– Moonka Honda 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 Moonka Auto: Growth Strategies Of A Honda Dealership - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Moonka Honda to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Moonka Honda can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Moonka Honda has opened avenues for new revenue streams for the organization in the industry. This can help Moonka Honda to build a more holistic ecosystem as suggested in the Moonka Auto: Growth Strategies Of A Honda Dealership case study. Moonka Honda can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Moonka Honda 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.
Manufacturing automation
– Moonka Honda can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Moonka Honda can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Moonka Honda is facing challenges because of the dominance of functional experts in the organization. Moonka Auto: Growth Strategies Of A Honda Dealership case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Moonka Honda in the consumer business. Now Moonka Honda can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Moonka Honda to increase its market reach. Moonka Honda 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Moonka Honda 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, Moonka Auto: Growth Strategies Of A Honda Dealership, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Moonka Auto: Growth Strategies Of A Honda Dealership External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Moonka Auto: Growth Strategies Of A Honda Dealership are -
Shortening product life cycle
– it is one of the major threat that Moonka Honda is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Moonka Honda 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.
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 Moonka Honda in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Regulatory challenges
– Moonka Honda 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Moonka Honda with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Moonka Honda 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.
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.
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 Moonka Honda.
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 Moonka Honda 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. Moonka Honda needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Moonka Honda in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Moonka Honda 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 Moonka Auto: Growth Strategies Of A Honda Dealership .
Consumer confidence and its impact on Moonka Honda 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 Moonka Auto: Growth Strategies Of A Honda Dealership 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 Moonka Auto: Growth Strategies Of A Honda Dealership 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 Moonka Auto: Growth Strategies Of A Honda Dealership 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 Moonka Auto: Growth Strategies Of A Honda Dealership 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 Moonka Auto: Growth Strategies Of A Honda Dealership 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 Moonka Honda needs to make to build a sustainable competitive advantage.
