Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives
Family members knew something was very wrong when Adolf Merckle, who had guided the family holding company, VEM VermA¶gensverwaltung GmbH, through dozens of successful investments, left the house one afternoon in January 2009 and failed to return. That night their fears were confirmed when a German railway worker located Merckle's body near a commuter train line near his hometown of Blaubeuren, about a hundred miles west of Munich. It was no secret that the recent financial crisis had taken a toll on Merckle's investments. He was known in Germany as a savvy investor, but had lost hundreds of millions of Euros after being caught on the wrong side of a short squeeze of epic proportions involving Volkswagen stock. This was not the only large bet against that company's stock. A number of hedge funds, including Greenlight Capital, SAC Capital, Glenview Capital, Tiger Asia, and Perry Capital, lost billions of Euros in a few hours based on their large short positions in Volkswagen's stock following the news on October 26, 2008, that Porsche AG had obtained a large long synthetic position in Volkswagen stock through cash-settled options. In the next two days, this short squeeze produced a fivefold increase in Volkswagen's share price, as demand for shares from hedge funds exceeded the supply of borrowable shares.
Swot Analysis of "Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives" written by David P. Stowell, Theron McLarty includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Merckle's Volkswagen facing as an external strategic factors. Some of the topics covered in Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives case study are - Strategic Management Strategies, Corporate governance, Financial management, Financial markets, International business and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives casestudy better are - – supply chains are disrupted by pandemic , increasing transportation and logistics costs, wage bills are increasing, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, etc
Introduction to SWOT Analysis of Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merckle's Volkswagen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merckle's Volkswagen 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives can be done for the following purposes –
1. Strategic planning using facts provided in Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives case study
2. Improving business portfolio management of Merckle's Volkswagen
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 Merckle's Volkswagen
Strengths Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merckle's Volkswagen in Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives Harvard Business Review case study are -
Analytics focus
– Merckle's Volkswagen 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 David P. Stowell, Theron McLarty 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.
Strong track record of project management
– Merckle's Volkswagen is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Merckle's Volkswagen
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Merckle's Volkswagen does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Merckle's Volkswagen has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Merckle's Volkswagen 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.
Superior customer experience
– The customer experience strategy of Merckle's Volkswagen in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Merckle's Volkswagen 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Merckle's Volkswagen are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Finance & Accounting field
– Merckle's Volkswagen 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 Merckle's Volkswagen in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Merckle's Volkswagen 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Merckle's Volkswagen in the sector have low bargaining power. Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Merckle's Volkswagen to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Merckle's Volkswagen digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Merckle's Volkswagen 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.
Weaknesses Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives are -
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 Merckle's Volkswagen supply chain. Even after few cautionary changes mentioned in the HBR case study - Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Merckle's Volkswagen vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Merckle's Volkswagen is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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 operating costs
– Compare to the competitors, firm in the HBR case study Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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 Merckle's Volkswagen 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Merckle's Volkswagen is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Merckle's Volkswagen needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Merckle's Volkswagen to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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 Merckle's Volkswagen has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Merckle's Volkswagen, firm in the HBR case study Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Merckle's Volkswagen 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Merckle's Volkswagen 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.
Need for greater diversity
– Merckle's Volkswagen 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives, in the dynamic environment Merckle's Volkswagen has struggled to respond to the nimble upstart competition. Merckle's Volkswagen has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives | 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives are -
Better consumer reach
– The expansion of the 5G network will help Merckle's Volkswagen to increase its market reach. Merckle's Volkswagen will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Creating value in data economy
– The success of analytics program of Merckle's Volkswagen has opened avenues for new revenue streams for the organization in the industry. This can help Merckle's Volkswagen to build a more holistic ecosystem as suggested in the Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives case study. Merckle's Volkswagen can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Merckle's Volkswagen 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.
Using analytics as competitive advantage
– Merckle's Volkswagen 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Merckle's Volkswagen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Merckle's Volkswagen can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Merckle's Volkswagen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Merckle's Volkswagen can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Merckle's Volkswagen can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Merckle's Volkswagen 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 Merckle's Volkswagen to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Merckle's Volkswagen 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Merckle's Volkswagen is facing challenges because of the dominance of functional experts in the organization. Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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 Merckle's Volkswagen 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.
Leveraging digital technologies
– Merckle's Volkswagen 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.
Threats Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives are -
Shortening product life cycle
– it is one of the major threat that Merckle's Volkswagen is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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. Merckle's Volkswagen needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Merckle's Volkswagen 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Merckle's Volkswagen 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Merckle's Volkswagen with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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
– Merckle's Volkswagen 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Merckle's Volkswagen 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.
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 Merckle's Volkswagen in the Finance & Accounting sector and impact the bottomline of the organization.
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. Merckle's Volkswagen 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives, Merckle's Volkswagen may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Merckle's Volkswagen business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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 Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives 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 Merckle's Volkswagen needs to make to build a sustainable competitive advantage.
