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 - – talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models,
increasing transportation and logistics costs, wage bills are increasing, 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 -
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.
Low bargaining power of suppliers
– Suppliers of Brazil's Garantia in the sector have low bargaining power. Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Brazil's Garantia to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
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.
Highly skilled collaborators
– Brazil's Garantia 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 Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Brazil's Garantia has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) 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.
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.
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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A), it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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, 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.
High cash cycle compare to competitors
Brazil's Garantia 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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Brazil's Garantia has relatively successful track record of launching new products.
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.
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.
Slow to strategic competitive environment developments
– As Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) HBR case study mentions - Brazil's Garantia 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.
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 -
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Brazil's Garantia can use these opportunities to build new business models that can help the communities that Brazil's Garantia operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Learning at scale
– Online learning technologies has now opened space for Brazil's Garantia 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.
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.
Creating value in data economy
– The success of analytics program of Brazil's Garantia has opened avenues for new revenue streams for the organization in the industry. This can help Brazil's Garantia to build a more holistic ecosystem as suggested in the Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) case study. Brazil's Garantia can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Brazil's Garantia 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, Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Brazil's Garantia to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Brazil's Garantia to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Brazil's Garantia 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. Brazil's Garantia 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.
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.
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.
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.
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 -
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.
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 .
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.
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.
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.
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. Brazil's Garantia 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.
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.
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.
Regulatory challenges
– Brazil's Garantia 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 Finance & Accounting industry regulations.
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.
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.
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.
Environmental challenges
– Brazil's Garantia 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. Brazil's Garantia can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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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