ARCOR Group's Internationalization and the ARCOR Foundation in Brazil SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ARCOR Group's Internationalization and the ARCOR Foundation in Brazil
Created in 1991, the ARCOR Foundation had built a reputation for its social investment programs devoted to childhood-related issues as well as for its operations' professionalism and magnitude in Argentina. Virtually since its inception, the Foundation focused on education to help mitigate childhood issues. Seventy percent of its budget was devoted to funding and supporting educational opportunities for very young children. To that end, the Foundation not only focused on program model creation but also on engaging other actors, knowledge building and advocacy for public policies targeted to young children. Its strategic approach also hinged on community work, engaging organizations and, primarily, institutional networks to enhance resources, mobilize actors, and coordinate efforts around public and private actors. Although ARCOR's affiliate in Brazil had, from early on, embarked on several educational, social and environmental actions, it was only in the late 1990s that the Group decided to have the Foundation -based in Argentina- support corporate community initiatives to accompany its Brazilian affiliate's growth. Among other initiatives, the case describes an initiative of cooperation with the World Childhood Foundation Institute and with FundaciA?n Vitae, as well as the replication of ARCOR Foundation's programs in Argentina. There is also an account of a survey to assess corporate social practices so far, which detected a somewhat dispersed and philanthropic approach.
Authors :: Daniel Chudnovsky, Mario Roitter
Topics :: Leadership & Managing People
Tags :: Generational issues, Globalization, Public relations, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "ARCOR Group's Internationalization and the ARCOR Foundation in Brazil" written by Daniel Chudnovsky, Mario Roitter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Arcor Foundation facing as an external strategic factors. Some of the topics covered in ARCOR Group's Internationalization and the ARCOR Foundation in Brazil case study are - Strategic Management Strategies, Generational issues, Globalization, Public relations, Social responsibility and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the ARCOR Group's Internationalization and the ARCOR Foundation in Brazil casestudy better are - – cloud computing is disrupting traditional business models, increasing commodity prices, there is backlash against globalization, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, geopolitical disruptions, etc
Introduction to SWOT Analysis of ARCOR Group's Internationalization and the ARCOR Foundation in Brazil
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ARCOR Group's Internationalization and the ARCOR Foundation in Brazil case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Arcor Foundation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Arcor Foundation 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil can be done for the following purposes –
1. Strategic planning using facts provided in ARCOR Group's Internationalization and the ARCOR Foundation in Brazil case study
2. Improving business portfolio management of Arcor Foundation
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Arcor Foundation
Strengths ARCOR Group's Internationalization and the ARCOR Foundation in Brazil | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Arcor Foundation in ARCOR Group's Internationalization and the ARCOR Foundation in Brazil Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Arcor Foundation in the sector have low bargaining power. ARCOR Group's Internationalization and the ARCOR Foundation in Brazil has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Arcor Foundation to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Arcor Foundation is one of the most innovative firm in sector. Manager in ARCOR Group's Internationalization and the ARCOR Foundation in Brazil Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Arcor Foundation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Arcor Foundation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Arcor Foundation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Arcor Foundation 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.
Diverse revenue streams
– Arcor Foundation is present in almost all the verticals within the industry. This has provided firm in ARCOR Group's Internationalization and the ARCOR Foundation in Brazil case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the Arcor Foundation 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.
Successful track record of launching new products
– Arcor Foundation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Arcor Foundation 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.
High brand equity
– Arcor Foundation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Arcor Foundation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Arcor Foundation 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Arcor Foundation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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.
Highly skilled collaborators
– Arcor Foundation 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Arcor Foundation 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 Arcor Foundation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ARCOR Group's Internationalization and the ARCOR Foundation in Brazil Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses ARCOR Group's Internationalization and the ARCOR Foundation in Brazil | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ARCOR Group's Internationalization and the ARCOR Foundation in Brazil are -
Products dominated business model
– Even though Arcor Foundation 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 - ARCOR Group's Internationalization and the ARCOR Foundation in Brazil should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil can leverage the sales team experience to cultivate customer relationships as Arcor Foundation is planning to shift buying processes online.
Lack of clear differentiation of Arcor Foundation products
– To increase the profitability and margins on the products, Arcor Foundation needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Arcor Foundation 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Daniel Chudnovsky, Mario Roitter suggests that, Arcor Foundation 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.
Increasing silos among functional specialists
– The organizational structure of Arcor Foundation is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Arcor Foundation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Arcor Foundation 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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 Arcor Foundation 's lucrative customers.
Interest costs
– Compare to the competition, Arcor Foundation 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.
Skills based hiring
– The stress on hiring functional specialists at Arcor Foundation 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil, it seems that the employees of Arcor Foundation 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.
Need for greater diversity
– Arcor Foundation 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.
Opportunities ARCOR Group's Internationalization and the ARCOR Foundation in Brazil | 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil are -
Buying journey improvements
– Arcor Foundation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Arcor Foundation 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. Arcor Foundation 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.
Using analytics as competitive advantage
– Arcor Foundation 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Arcor Foundation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Arcor Foundation 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, ARCOR Group's Internationalization and the ARCOR Foundation in Brazil, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Arcor Foundation is facing challenges because of the dominance of functional experts in the organization. ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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.
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 Arcor Foundation 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.
Creating value in data economy
– The success of analytics program of Arcor Foundation has opened avenues for new revenue streams for the organization in the industry. This can help Arcor Foundation to build a more holistic ecosystem as suggested in the ARCOR Group's Internationalization and the ARCOR Foundation in Brazil case study. Arcor Foundation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Arcor Foundation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Arcor Foundation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Arcor Foundation can use these opportunities to build new business models that can help the communities that Arcor Foundation operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Arcor Foundation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Arcor Foundation 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.
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 Arcor Foundation in the consumer business. Now Arcor Foundation can target international markets with far fewer capital restrictions requirements than the existing system.
Threats ARCOR Group's Internationalization and the ARCOR Foundation in Brazil External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ARCOR Group's Internationalization and the ARCOR Foundation in Brazil are -
Increasing wage structure of Arcor Foundation
– 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 Arcor Foundation.
Consumer confidence and its impact on Arcor Foundation 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.
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 Arcor Foundation.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Arcor Foundation in the Leadership & Managing People industry. The Leadership & Managing People 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.
Environmental challenges
– Arcor Foundation 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. Arcor Foundation can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Arcor Foundation business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ARCOR Group's Internationalization and the ARCOR Foundation in Brazil, Arcor Foundation may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Technology acceleration in Forth Industrial Revolution
– Arcor Foundation has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Arcor Foundation needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Arcor Foundation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Arcor Foundation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Arcor Foundation 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.
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.
Shortening product life cycle
– it is one of the major threat that Arcor Foundation is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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 ARCOR Group's Internationalization and the ARCOR Foundation in Brazil 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 Arcor Foundation needs to make to build a sustainable competitive advantage.