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, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, geopolitical disruptions,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, 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 -
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.
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.
Analytics focus
– Brazil's Garantia 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 R. Jeffrey Ellis 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.
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 recruit top talent
– Brazil's Garantia is one of the leading recruiters in the industry. Managers in the Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
Sustainable margins compare to other players in Finance & Accounting industry
– Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) firm has clearly differentiated products in the market place. This has enabled Brazil's Garantia to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Brazil's Garantia to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Brazil's Garantia 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.
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.
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 -
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 bargaining power of channel partners
– Because of the regulatory requirements, R. Jeffrey Ellis suggests that, Brazil's Garantia 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.
Lack of clear differentiation of Brazil's Garantia products
– To increase the profitability and margins on the products, Brazil's Garantia needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Brazil's Garantia is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Grupo Garantia: Globalization, Industry Rivalry, and Conglomerate Diversification in Brazil (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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 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.
Slow decision making process
– As mentioned earlier in the report, Brazil's Garantia 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. Brazil's Garantia 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 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.
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 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.
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 -
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.
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.
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Brazil's Garantia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Brazil's Garantia in the consumer business. Now Brazil's Garantia can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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 -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Brazil's Garantia in the Finance & Accounting industry. The Finance & Accounting 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.
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.
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.
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 dependence on third party suppliers
– Brazil's Garantia 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.
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.
Consumer confidence and its impact on Brazil's Garantia 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.
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.
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.
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.
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.
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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