Transforming People's Lives: The Vehicles for Change Story SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Transforming People's Lives: The Vehicles for Change Story
VFC's primary purpose is to assist low-income families own vehicles so that they can achieve financial independence. Most of the vehicles VFC awarded to low-income families were donated. To supplement its budget, VFC also established a used car sales business called Freedom Wheels (FW) which soon became a profitable enterprise. Nearly all of FW's profits were transferred to support VFC's mission. Marty Schwartz, President of VFC, believed that allowing FW to retain more of its profits would allow it to grow its used car business which would bring even larger financial benefits to VFC in the long-run. In the short-term, however, this would reduce the number of vehicles awarded to low-income families-a sensitive issue for many members of his board. At the upcoming board meeting, therefore, Schwartz's primary challenge was to present an assessment of the potential impact on the vehicle award program of allowing FW to retain more of its profits, and to recommend what percentage of its profits FW should be allowed to retain. He was also prepared to examine other options for growing VFC's revenue, and to consider the wisdom of spinning-off FW as a separate for-profit entity.
Authors :: Tigineh Mersha, Christine Nielsen, Ven Sriram, John C. Weiss
Swot Analysis of "Transforming People's Lives: The Vehicles for Change Story" written by Tigineh Mersha, Christine Nielsen, Ven Sriram, John C. Weiss includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fw Vfc facing as an external strategic factors. Some of the topics covered in Transforming People's Lives: The Vehicles for Change Story case study are - Strategic Management Strategies, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Transforming People's Lives: The Vehicles for Change Story casestudy better are - – wage bills are increasing, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing energy prices, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
technology disruption, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Transforming People's Lives: The Vehicles for Change Story
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Transforming People's Lives: The Vehicles for Change Story case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fw Vfc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fw Vfc 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 Transforming People's Lives: The Vehicles for Change Story can be done for the following purposes –
1. Strategic planning using facts provided in Transforming People's Lives: The Vehicles for Change Story case study
2. Improving business portfolio management of Fw Vfc
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 Fw Vfc
Strengths Transforming People's Lives: The Vehicles for Change Story | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fw Vfc in Transforming People's Lives: The Vehicles for Change Story Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Fw Vfc 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 Fw Vfc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Fw Vfc in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Fw Vfc 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 Transforming People's Lives: The Vehicles for Change Story HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Fw Vfc is one of the leading recruiters in the industry. Managers in the Transforming People's Lives: The Vehicles for Change Story are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Fw Vfc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fw Vfc 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Transforming People's Lives: The Vehicles for Change Story firm has clearly differentiated products in the market place. This has enabled Fw Vfc to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Fw Vfc to invest into research and development (R&D) and innovation.
High brand equity
– Fw Vfc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fw Vfc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Fw Vfc 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 Transforming People's Lives: The Vehicles for Change Story - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Fw Vfc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fw Vfc 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.
Strong track record of project management
– Fw Vfc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Transforming People's Lives: The Vehicles for Change Story 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.
High switching costs
– The high switching costs that Fw Vfc 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.
Weaknesses Transforming People's Lives: The Vehicles for Change Story | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transforming People's Lives: The Vehicles for Change Story are -
Skills based hiring
– The stress on hiring functional specialists at Fw Vfc 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Transforming People's Lives: The Vehicles for Change Story, is just above the industry average. Fw Vfc needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Lack of clear differentiation of Fw Vfc products
– To increase the profitability and margins on the products, Fw Vfc needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Transforming People's Lives: The Vehicles for Change Story HBR case study mentions - Fw Vfc 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.
High cash cycle compare to competitors
Fw Vfc 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.
Capital Spending Reduction
– Even during the low interest decade, Fw Vfc 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Fw Vfc 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.
No frontier risks strategy
– After analyzing the HBR case study Transforming People's Lives: The Vehicles for Change Story, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
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 Fw Vfc supply chain. Even after few cautionary changes mentioned in the HBR case study - Transforming People's Lives: The Vehicles for Change Story, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fw Vfc vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Transforming People's Lives: The Vehicles for Change Story 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 Fw Vfc 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Transforming People's Lives: The Vehicles for Change Story 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 Transforming People's Lives: The Vehicles for Change Story can leverage the sales team experience to cultivate customer relationships as Fw Vfc is planning to shift buying processes online.
Opportunities Transforming People's Lives: The Vehicles for Change Story | 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 Transforming People's Lives: The Vehicles for Change Story are -
Leveraging digital technologies
– Fw Vfc 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.
Buying journey improvements
– Fw Vfc can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Transforming People's Lives: The Vehicles for Change Story 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fw Vfc 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 Fw Vfc to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fw Vfc in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Loyalty marketing
– Fw Vfc 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fw Vfc 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, Transforming People's Lives: The Vehicles for Change Story, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Fw Vfc 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.
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 Fw Vfc in the consumer business. Now Fw Vfc can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Fw Vfc can develop new processes and procedures in Leadership & Managing People 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.
Manufacturing automation
– Fw Vfc can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fw Vfc 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 Fw Vfc 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. Fw Vfc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Transforming People's Lives: The Vehicles for Change Story External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Transforming People's Lives: The Vehicles for Change Story are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fw Vfc can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Transforming People's Lives: The Vehicles for Change Story .
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 Fw Vfc in the Leadership & Managing People sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Fw Vfc is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
High dependence on third party suppliers
– Fw Vfc 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.
Stagnating economy with rate increase
– Fw Vfc 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 Transforming People's Lives: The Vehicles for Change Story, Fw Vfc 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fw Vfc 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.
Regulatory challenges
– Fw Vfc 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 Leadership & Managing People industry regulations.
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 Fw Vfc business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Fw Vfc
– 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 Fw Vfc.
Consumer confidence and its impact on Fw Vfc 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.
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. Fw Vfc 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 Transforming People's Lives: The Vehicles for Change Story 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 Transforming People's Lives: The Vehicles for Change Story 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 Transforming People's Lives: The Vehicles for Change Story 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 Transforming People's Lives: The Vehicles for Change Story 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 Transforming People's Lives: The Vehicles for Change Story 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 Fw Vfc needs to make to build a sustainable competitive advantage.
