The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 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 (D): Episode 3
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 (D): Episode 3" 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 (D): Episode 3 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 (D): Episode 3 casestudy better are - – increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, wage bills are increasing, increasing household debt because of falling income levels, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
cloud computing is disrupting traditional business models, increasing energy prices, etc
Introduction to SWOT Analysis of The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3
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 (D): Episode 3 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 (D): Episode 3 can be done for the following purposes –
1. Strategic planning using facts provided in The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 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 (D): Episode 3 | 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 (D): Episode 3 Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Chip Automobile 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.
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.
High switching costs
– The high switching costs that Chip Automobile 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.
Strong track record of project management
– Chip Automobile is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Chip Automobile digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chip Automobile 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.
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 (D): Episode 3 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.
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 (D): Episode 3 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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 (D): Episode 3 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 firm has clearly differentiated products in the market place. This has enabled Chip Automobile to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Chip Automobile to invest into research and development (R&D) and innovation.
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 (D): Episode 3 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 (D): Episode 3 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 | 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 (D): Episode 3 are -
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Chip Automobile 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.
Products dominated business model
– Even though Chip Automobile 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 - The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Chip Automobile is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Chip Automobile needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chip Automobile to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Chip Automobile 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.
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 Chip Automobile supply chain. Even after few cautionary changes mentioned in the HBR case study - The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chip Automobile vulnerable to further global disruptions in South East Asia.
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 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 (D): Episode 3 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3, 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.
Slow to strategic competitive environment developments
– As The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 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.
Opportunities The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 | 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 (D): Episode 3 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.
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.
Using analytics as competitive advantage
– Chip Automobile 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 The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chip Automobile to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Chip Automobile can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 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.
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.
Better consumer reach
– The expansion of the 5G network will help Chip Automobile to increase its market reach. Chip Automobile 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.
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. Chip Automobile can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 (D): Episode 3, 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chip Automobile 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 Chip Automobile to hire the very best people irrespective of their geographical location.
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. Chip Automobile 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. Chip Automobile 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.
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 (D): Episode 3 case study. Chip Automobile can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 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 (D): Episode 3 are -
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.
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.
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.
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.
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 Chip Automobile.
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 (D): Episode 3 .
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. Chip Automobile can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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 (D): Episode 3, 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 .
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 Chip Automobile 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 The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 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 (D): Episode 3 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 (D): Episode 3 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 (D): Episode 3 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 (D): Episode 3 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.