Case Study Description of Volkswagen Navarra, 8th Collective Agreement (A)
In September 2012, Carlos Escobar, director of human resources for the Volkswagen plant in Navarra (hereafter, VW Navarra), was sitting in his office reading the mail that his secretary left him on his desk each morning. That day, the first letter in the pile was from Germany, signed by Herbert Waltl, the production manager for all the European Volkswagen (VW) plants. After reading the letter, Carlos called Patrick Danau, general manager of VW EspaA?a, and asked to meet with him that morning to discuss a last-minute development: "Patrick, we need to revoke the labor agreement and start negotiating the new 8th Collective Agreement with the labor unions, since the previous one expires in a few months. A few hours ago, I received a letter from Germany giving me instructions to pursue the same labor costs as SEAT. I am deeply concerned, Patrick; I can't cut employee salaries any further. How can we reduce labor costs if we are more expensive? It's not possible!"
Authors :: Guido Stein Martinez, Carlos Escobar, Marta Cuadrado, Jose Ramon Pin Arboledas
Swot Analysis of "Volkswagen Navarra, 8th Collective Agreement (A)" written by Guido Stein Martinez, Carlos Escobar, Marta Cuadrado, Jose Ramon Pin Arboledas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Navarra Vw facing as an external strategic factors. Some of the topics covered in Volkswagen Navarra, 8th Collective Agreement (A) case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Volkswagen Navarra, 8th Collective Agreement (A) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Volkswagen Navarra, 8th Collective Agreement (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Volkswagen Navarra, 8th Collective Agreement (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Navarra Vw, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Navarra Vw 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 Volkswagen Navarra, 8th Collective Agreement (A) can be done for the following purposes –
1. Strategic planning using facts provided in Volkswagen Navarra, 8th Collective Agreement (A) case study
2. Improving business portfolio management of Navarra Vw
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 Navarra Vw
Strengths Volkswagen Navarra, 8th Collective Agreement (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Navarra Vw in Volkswagen Navarra, 8th Collective Agreement (A) Harvard Business Review case study are -
Training and development
– Navarra Vw has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Volkswagen Navarra, 8th Collective Agreement (A) 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.
Organizational Resilience of Navarra Vw
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Navarra Vw does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Leadership & Managing People field
– Navarra Vw 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 Navarra Vw in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Navarra Vw has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Navarra Vw to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Navarra Vw 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.
Cross disciplinary teams
– Horizontal connected teams at the Navarra Vw 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.
Successful track record of launching new products
– Navarra Vw has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Navarra Vw 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.
Analytics focus
– Navarra Vw 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 Guido Stein Martinez, Carlos Escobar, Marta Cuadrado, Jose Ramon Pin Arboledas 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.
Learning organization
- Navarra Vw 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 Navarra Vw is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Volkswagen Navarra, 8th Collective Agreement (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Navarra Vw is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Navarra Vw is one of the most innovative firm in sector. Manager in Volkswagen Navarra, 8th Collective Agreement (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Navarra Vw digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Navarra Vw 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 Volkswagen Navarra, 8th Collective Agreement (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Volkswagen Navarra, 8th Collective Agreement (A) are -
Aligning sales with marketing
– It come across in the case study Volkswagen Navarra, 8th Collective Agreement (A) 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 Volkswagen Navarra, 8th Collective Agreement (A) can leverage the sales team experience to cultivate customer relationships as Navarra Vw is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Navarra Vw, firm in the HBR case study Volkswagen Navarra, 8th Collective Agreement (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Guido Stein Martinez, Carlos Escobar, Marta Cuadrado, Jose Ramon Pin Arboledas suggests that, Navarra Vw 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Navarra Vw is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Volkswagen Navarra, 8th Collective Agreement (A) 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 cash cycle compare to competitors
Navarra Vw 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.
Slow to strategic competitive environment developments
– As Volkswagen Navarra, 8th Collective Agreement (A) HBR case study mentions - Navarra Vw 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 decision making process
– As mentioned earlier in the report, Navarra Vw 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. Navarra Vw 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Volkswagen Navarra, 8th Collective Agreement (A), it seems that the employees of Navarra Vw 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, Navarra Vw 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Volkswagen Navarra, 8th Collective Agreement (A) 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 Navarra Vw has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Volkswagen Navarra, 8th Collective Agreement (A), is just above the industry average. Navarra Vw 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.
Opportunities Volkswagen Navarra, 8th Collective Agreement (A) | 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 Volkswagen Navarra, 8th Collective Agreement (A) are -
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 Navarra Vw 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Navarra Vw 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 Navarra Vw to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Navarra Vw 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 Volkswagen Navarra, 8th Collective Agreement (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Navarra Vw to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Navarra Vw 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.
Creating value in data economy
– The success of analytics program of Navarra Vw has opened avenues for new revenue streams for the organization in the industry. This can help Navarra Vw to build a more holistic ecosystem as suggested in the Volkswagen Navarra, 8th Collective Agreement (A) case study. Navarra Vw can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Navarra Vw 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, Volkswagen Navarra, 8th Collective Agreement (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Navarra Vw to increase its market reach. Navarra Vw 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.
Building a culture of innovation
– managers at Navarra Vw 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.
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. Navarra Vw 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. Navarra Vw 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.
Buying journey improvements
– Navarra Vw can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Volkswagen Navarra, 8th Collective Agreement (A) 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.
Manufacturing automation
– Navarra Vw 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.
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. Navarra Vw can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Navarra Vw can use these opportunities to build new business models that can help the communities that Navarra Vw operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Volkswagen Navarra, 8th Collective Agreement (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Volkswagen Navarra, 8th Collective Agreement (A) are -
Regulatory challenges
– Navarra Vw 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.
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. Navarra Vw needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Navarra Vw 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 Volkswagen Navarra, 8th Collective Agreement (A) .
Environmental challenges
– Navarra Vw 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. Navarra Vw can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Navarra Vw with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Navarra Vw 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.
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 Navarra Vw.
High dependence on third party suppliers
– Navarra Vw 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.
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.
Increasing wage structure of Navarra Vw
– 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 Navarra Vw.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Navarra Vw 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.
Shortening product life cycle
– it is one of the major threat that Navarra Vw 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 Volkswagen Navarra, 8th Collective Agreement (A) 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 Volkswagen Navarra, 8th Collective Agreement (A) 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 Volkswagen Navarra, 8th Collective Agreement (A) 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 Volkswagen Navarra, 8th Collective Agreement (A) 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 Volkswagen Navarra, 8th Collective Agreement (A) 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 Navarra Vw needs to make to build a sustainable competitive advantage.