Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A)
Grupo Garantia was a spectacularly successful conglomerate group in Brazil. Observers commonly called its founder The Midas King - all he touched seemingly turned to gold. The group encompasses four main businesses: Brazil's biggest investment bank; one of Brazil's largest retail chains; one of the world's largest breweries; and an equity investment company. The collection of six cases (including an appendix on Brazil's socio-politics) examines the fortunes of each of the businesses and of the corporation during the period of Brazil's globalization. Students must decide how to shape the future of the group's businesses, which global competition has variously boosted or ravaged. The Grupo's fate is also in question given the stabilization of Brazil's economy and the need to structure corporations according to the new circumstances faced by an economy more integrated into the world economy.
Swot Analysis of "Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A)" written by R. Jeffrey Ellis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Brazil's Garantia facing as an external strategic factors. Some of the topics covered in Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) case study are - Strategic Management Strategies, Economy, Emerging markets, Globalization, Joint ventures and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) casestudy better are - – technology disruption, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , wage bills are increasing,
increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Brazil's Garantia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Brazil's Garantia 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) can be done for the following purposes –
1. Strategic planning using facts provided in Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) case study
2. Improving business portfolio management of Brazil's Garantia
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Brazil's Garantia
Strengths Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Brazil's Garantia in Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) Harvard Business Review case study are -
Diverse revenue streams
– Brazil's Garantia is present in almost all the verticals within the industry. This has provided firm in Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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.
Learning organization
- Brazil's Garantia 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 Brazil's Garantia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Brazil's Garantia in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Brazil's Garantia 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Brazil's Garantia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Brazil's Garantia 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.
Cross disciplinary teams
– Horizontal connected teams at the Brazil's Garantia 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.
Ability to lead change in Finance & Accounting field
– Brazil's Garantia 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 Brazil's Garantia 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
– Brazil's Garantia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Brazil's Garantia is one of the most innovative firm in sector. Manager in Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Brazil's Garantia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Brazil's Garantia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Brazil's Garantia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Brazil's Garantia 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.
Operational resilience
– The operational resilience strategy in the Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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.
Weaknesses Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) are -
Low market penetration in new markets
– Outside its home market of Brazil's Garantia, firm in the HBR case study Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Brazil's Garantia 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A), it seems that the employees of Brazil's Garantia 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.
Interest costs
– Compare to the competition, Brazil's Garantia 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Brazil's Garantia 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.
Increasing silos among functional specialists
– The organizational structure of Brazil's Garantia is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Brazil's Garantia needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Brazil's Garantia to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Brazil's Garantia has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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 Brazil's Garantia 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Brazil's Garantia 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.
Aligning sales with marketing
– It come across in the case study Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) can leverage the sales team experience to cultivate customer relationships as Brazil's Garantia is planning to shift buying processes online.
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 Brazil's Garantia supply chain. Even after few cautionary changes mentioned in the HBR case study - Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Brazil's Garantia vulnerable to further global disruptions in South East Asia.
Opportunities Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) | 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) are -
Better consumer reach
– The expansion of the 5G network will help Brazil's Garantia to increase its market reach. Brazil's Garantia 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Brazil's Garantia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Brazil's Garantia 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Brazil's Garantia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Brazil's Garantia is facing challenges because of the dominance of functional experts in the organization. Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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.
Building a culture of innovation
– managers at Brazil's Garantia 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 Finance & Accounting segment.
Developing new processes and practices
– Brazil's Garantia can develop new processes and procedures in Finance & Accounting 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Brazil's Garantia 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.
Loyalty marketing
– Brazil's Garantia 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.
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. Brazil's Garantia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Brazil's Garantia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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 Brazil's Garantia in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Brazil's Garantia 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.
Manufacturing automation
– Brazil's Garantia can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Threats Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) are -
Shortening product life cycle
– it is one of the major threat that Brazil's Garantia is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Brazil's Garantia.
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 Brazil's Garantia in the Finance & Accounting sector and impact the bottomline of the organization.
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. Brazil's Garantia needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Brazil's Garantia 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A), Brazil's Garantia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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 Brazil's Garantia business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Brazil's Garantia
– 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 Brazil's Garantia.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Brazil's Garantia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Brazil's Garantia has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Brazil's Garantia needs to keep up with the evolution of technology in the Finance & Accounting 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.
Stagnating economy with rate increase
– Brazil's Garantia 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.
Weighted SWOT Analysis of Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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 Brazil's Garantia needs to make to build a sustainable competitive advantage.
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