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 - – talent flight as more people leaving formal jobs, increasing energy prices, challanges to central banks by blockchain based private currencies, technology disruption, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
central banks are concerned over increasing inflation, wage bills are increasing, 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 -
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.
Ability to lead change in Leadership & Managing People field
– Chip Automobile 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 Chip Automobile in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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 (D): Episode 3 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 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.
Analytics focus
– Chip Automobile 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 Kim Van Oorschot, Kishore Sengupta 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.
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.
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.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Chip Automobile 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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 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 Chip Automobile has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3, is just above the industry average. Chip Automobile 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.
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.
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.
Lack of clear differentiation of Chip Automobile products
– To increase the profitability and margins on the products, Chip Automobile needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study The InnoCar Project - Developing a Chip for the Future Automobile (D): Episode 3 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.
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.
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.
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 -
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.
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.
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.
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.
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 Chip Automobile in the consumer business. Now Chip Automobile can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Manufacturing automation
– Chip Automobile 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.
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.
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.
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.
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.
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.
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 (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 -
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 .
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.
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.
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. Chip Automobile needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
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.
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.
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 .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Chip Automobile with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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.
