Volkswagen Group: Driving Big Business With Big Data SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Volkswagen Group: Driving Big Business With Big Data
The Volkswagen Group (VW Group) had set a firm-wide "Strategy 2018," which sought to make Volkswagen "the most successful and fascinating automaker in the world by 2018." According to the strategy, the company would reach annual sales of 10 million vehicles worldwide. To achieve this ambitious goal, VW Group placed "intelligent innovations and technologies" at the top of its agenda. Big data, broadly defined, represented an important opportunity for the company. In this exercise, the class will be divided into teams, and each team will design an initiative that leverages big data to help the VW Group make significant progress towards its objective. The teams will present their initiatives at the upcoming executive meeting, at which time the best initiative will be selected.
Swot Analysis of "Volkswagen Group: Driving Big Business With Big Data" written by Ning Su, Naqaash Pirani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vw Volkswagen facing as an external strategic factors. Some of the topics covered in Volkswagen Group: Driving Big Business With Big Data case study are - Strategic Management Strategies, Growth strategy, International business, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Volkswagen Group: Driving Big Business With Big Data casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
wage bills are increasing, increasing energy prices, etc
Introduction to SWOT Analysis of Volkswagen Group: Driving Big Business With Big Data
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Volkswagen Group: Driving Big Business With Big Data case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vw Volkswagen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vw Volkswagen 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 Volkswagen Group: Driving Big Business With Big Data can be done for the following purposes –
1. Strategic planning using facts provided in Volkswagen Group: Driving Big Business With Big Data case study
2. Improving business portfolio management of Vw Volkswagen
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 Vw Volkswagen
Strengths Volkswagen Group: Driving Big Business With Big Data | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vw Volkswagen in Volkswagen Group: Driving Big Business With Big Data Harvard Business Review case study are -
Highly skilled collaborators
– Vw Volkswagen 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 Volkswagen Group: Driving Big Business With Big Data 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 Volkswagen Group: Driving Big Business With Big Data 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.
Effective Research and Development (R&D)
– Vw Volkswagen 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 Volkswagen Group: Driving Big Business With Big Data - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Volkswagen Group: Driving Big Business With Big Data firm has clearly differentiated products in the market place. This has enabled Vw Volkswagen to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Vw Volkswagen to invest into research and development (R&D) and innovation.
Innovation driven organization
– Vw Volkswagen is one of the most innovative firm in sector. Manager in Volkswagen Group: Driving Big Business With Big Data Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Vw Volkswagen has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Volkswagen Group: Driving Big Business With Big Data 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.
Analytics focus
– Vw Volkswagen 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 Ning Su, Naqaash Pirani 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.
Diverse revenue streams
– Vw Volkswagen is present in almost all the verticals within the industry. This has provided firm in Volkswagen Group: Driving Big Business With Big Data 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.
Ability to recruit top talent
– Vw Volkswagen is one of the leading recruiters in the industry. Managers in the Volkswagen Group: Driving Big Business With Big Data are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Vw Volkswagen 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.
Low bargaining power of suppliers
– Suppliers of Vw Volkswagen in the sector have low bargaining power. Volkswagen Group: Driving Big Business With Big Data has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vw Volkswagen to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Vw Volkswagen has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vw Volkswagen 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.
Weaknesses Volkswagen Group: Driving Big Business With Big Data | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Volkswagen Group: Driving Big Business With Big Data are -
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 Vw Volkswagen supply chain. Even after few cautionary changes mentioned in the HBR case study - Volkswagen Group: Driving Big Business With Big Data, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vw Volkswagen vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Vw Volkswagen 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 bargaining power of channel partners
– Because of the regulatory requirements, Ning Su, Naqaash Pirani suggests that, Vw Volkswagen is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Volkswagen Group: Driving Big Business With Big Data, it seems that the employees of Vw Volkswagen don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vw Volkswagen is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Volkswagen Group: Driving Big Business With Big Data can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Vw Volkswagen 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 - Volkswagen Group: Driving Big Business With Big Data should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Vw Volkswagen 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.
Increasing silos among functional specialists
– The organizational structure of Vw Volkswagen is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Vw Volkswagen needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vw Volkswagen to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Vw Volkswagen, firm in the HBR case study Volkswagen Group: Driving Big Business With Big Data needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Vw Volkswagen 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 Vw Volkswagen products
– To increase the profitability and margins on the products, Vw Volkswagen needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Volkswagen Group: Driving Big Business With Big Data | 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 Volkswagen Group: Driving Big Business With Big Data are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vw Volkswagen 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, Volkswagen Group: Driving Big Business With Big Data, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Vw Volkswagen 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.
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 Vw Volkswagen 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vw Volkswagen 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vw Volkswagen can use these opportunities to build new business models that can help the communities that Vw Volkswagen operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Creating value in data economy
– The success of analytics program of Vw Volkswagen has opened avenues for new revenue streams for the organization in the industry. This can help Vw Volkswagen to build a more holistic ecosystem as suggested in the Volkswagen Group: Driving Big Business With Big Data case study. Vw Volkswagen can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Vw Volkswagen 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Vw Volkswagen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vw Volkswagen is facing challenges because of the dominance of functional experts in the organization. Volkswagen Group: Driving Big Business With Big Data 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.
Buying journey improvements
– Vw Volkswagen can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Volkswagen Group: Driving Big Business With Big Data 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vw Volkswagen 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.
Loyalty marketing
– Vw Volkswagen 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Vw Volkswagen 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. Vw Volkswagen 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.
Threats Volkswagen Group: Driving Big Business With Big Data External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Volkswagen Group: Driving Big Business With Big Data are -
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vw Volkswagen can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Vw Volkswagen 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. Vw Volkswagen can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vw Volkswagen 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 Volkswagen Group: Driving Big Business With Big Data .
Stagnating economy with rate increase
– Vw Volkswagen 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
– Vw Volkswagen has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Vw Volkswagen needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Vw Volkswagen is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Vw Volkswagen needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Vw Volkswagen.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vw Volkswagen with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Vw Volkswagen in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Regulatory challenges
– Vw Volkswagen 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
Weighted SWOT Analysis of Volkswagen Group: Driving Big Business With Big Data 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 Volkswagen Group: Driving Big Business With Big Data 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 Volkswagen Group: Driving Big Business With Big Data 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 Volkswagen Group: Driving Big Business With Big Data 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 Volkswagen Group: Driving Big Business With Big Data 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 Vw Volkswagen needs to make to build a sustainable competitive advantage.
