The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1
The case tracks a large project for developing a chip for automobile entertainment systems. Participants evaluate the project's continuing progress and viability through three episodes. The case holds important lessons for evaluating complex new product development projects that lack visibility, as well as the efficacy of stage gates for monitoring such projects.
Swot Analysis of "The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1" written by Kim Van Oorschot, Kishore Sengupta includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chip Automobile facing as an external strategic factors. Some of the topics covered in The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 case study are - Strategic Management Strategies, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 casestudy better are - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, increasing energy prices, wage bills are increasing, there is backlash against globalization,
geopolitical disruptions, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chip Automobile, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chip Automobile 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 can be done for the following purposes –
1. Strategic planning using facts provided in The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 case study
2. Improving business portfolio management of Chip Automobile
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 Chip Automobile
Strengths The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chip Automobile in The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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.
Superior customer experience
– The customer experience strategy of Chip Automobile in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Chip Automobile is one of the leading recruiters in the industry. Managers in the The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Chip Automobile has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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.
Learning organization
- Chip Automobile 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 Chip Automobile is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Chip Automobile 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Chip Automobile has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chip Automobile to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Chip Automobile 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Chip Automobile has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chip Automobile 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.
Innovation driven organization
– Chip Automobile is one of the most innovative firm in sector. Manager in The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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 Chip Automobile
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Chip Automobile does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Chip Automobile in the sector have low bargaining power. The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chip Automobile to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 are -
Aligning sales with marketing
– It come across in the case study The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 can leverage the sales team experience to cultivate customer relationships as Chip Automobile is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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 Chip Automobile 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Chip Automobile 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.
Slow decision making process
– As mentioned earlier in the report, Chip Automobile 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. Chip Automobile 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1, in the dynamic environment Chip Automobile has struggled to respond to the nimble upstart competition. Chip Automobile has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 HBR case study mentions - Chip Automobile 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chip Automobile is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Chip Automobile, firm in the HBR case study The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1, it seems that the employees of Chip Automobile 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.
Interest costs
– Compare to the competition, Chip Automobile has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Kim Van Oorschot, Kishore Sengupta suggests that, Chip Automobile 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.
Opportunities The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 | 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 are -
Leveraging digital technologies
– Chip Automobile 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chip Automobile can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chip Automobile 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chip Automobile can use these opportunities to build new business models that can help the communities that Chip Automobile operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Learning at scale
– Online learning technologies has now opened space for Chip Automobile to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chip Automobile 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, The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Chip Automobile 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.
Building a culture of innovation
– managers at Chip Automobile 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 Leadership & Managing People segment.
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 Chip Automobile 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 Chip Automobile has opened avenues for new revenue streams for the organization in the industry. This can help Chip Automobile to build a more holistic ecosystem as suggested in the The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 case study. Chip Automobile can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Chip Automobile 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chip Automobile is facing challenges because of the dominance of functional experts in the organization. The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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.
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. Chip Automobile can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 are -
Environmental challenges
– Chip Automobile 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. Chip Automobile can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Chip Automobile
– 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 Chip Automobile.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1, Chip Automobile 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 .
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 Chip Automobile business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Chip Automobile has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Chip Automobile 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.
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 Chip Automobile in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Regulatory challenges
– Chip Automobile 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.
Stagnating economy with rate increase
– Chip Automobile 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chip Automobile 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.
High dependence on third party suppliers
– Chip Automobile 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.
Consumer confidence and its impact on Chip Automobile 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chip Automobile 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 .
Weighted SWOT Analysis of The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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 The InnoCar Project - Developing a Chip for the Future Automobile (B): Episode 1 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 Chip Automobile needs to make to build a sustainable competitive advantage.