Case Study Description of Volkswagen Navarra, 8th Collective Agreement (B)
Supplement case for IES332.After more than eight months without the negotiating parties managing to reach an agreement, the unions decided to call in their German counterpart to help find a solution and make the parent company aware of why it had not been possible to reach an agreement in Spain. On the other hand, in response to the drawn out nature of the negotiating period, the management from Wolfsburg contacted Patrick and Carlos to find out what was causing the lack of agreement that had continued for several months at the plant in Navarra. Carlos argued that it stemmed from the union representatives' continuous rejection of the proposals put together by his team, who could not manage to gain approval for any of their proposals.The head of human resources for the Volkswagen brand, Martin Rosick, and the representative of IG Metall and general secretary of the VW European and Global Workers' Committee, Frank Patta, were given the job of visiting Navarra on July 23 and 24 to respond to the call from the union representatives and to help resolve the deadlock in the process of negotiating the agreement by facilitating dialogue between the parties. On the afternoon of July 23, all of the union representatives from the plant met with Frank Patta to discuss the demands that the platform had proposed as well as the barriers that had been put up by the management of the company up to that point.
Authors :: Guido Stein Martinez, Carlos Escobar, Marta Cuadrado, Jose Ramon Pin Arboledas
Swot Analysis of "Volkswagen Navarra, 8th Collective Agreement (B)" 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 Agreement facing as an external strategic factors. Some of the topics covered in Volkswagen Navarra, 8th Collective Agreement (B) 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 (B) casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Volkswagen Navarra, 8th Collective Agreement (B)
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 (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Navarra Agreement, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Navarra Agreement 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 (B) can be done for the following purposes –
1. Strategic planning using facts provided in Volkswagen Navarra, 8th Collective Agreement (B) case study
2. Improving business portfolio management of Navarra Agreement
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 Agreement
Strengths Volkswagen Navarra, 8th Collective Agreement (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Navarra Agreement in Volkswagen Navarra, 8th Collective Agreement (B) Harvard Business Review case study are -
Innovation driven organization
– Navarra Agreement is one of the most innovative firm in sector. Manager in Volkswagen Navarra, 8th Collective Agreement (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Navarra Agreement 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.
Ability to recruit top talent
– Navarra Agreement is one of the leading recruiters in the industry. Managers in the Volkswagen Navarra, 8th Collective Agreement (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Navarra Agreement digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Navarra Agreement 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.
Diverse revenue streams
– Navarra Agreement is present in almost all the verticals within the industry. This has provided firm in Volkswagen Navarra, 8th Collective Agreement (B) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Effective Research and Development (R&D)
– Navarra Agreement 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 Volkswagen Navarra, 8th Collective Agreement (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Volkswagen Navarra, 8th Collective Agreement (B) 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Volkswagen Navarra, 8th Collective Agreement (B) firm has clearly differentiated products in the market place. This has enabled Navarra Agreement to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Navarra Agreement to invest into research and development (R&D) and innovation.
High brand equity
– Navarra Agreement has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Navarra Agreement to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Navarra Agreement in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Navarra Agreement has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Navarra Agreement 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.
Low bargaining power of suppliers
– Suppliers of Navarra Agreement in the sector have low bargaining power. Volkswagen Navarra, 8th Collective Agreement (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Navarra Agreement to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Volkswagen Navarra, 8th Collective Agreement (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Volkswagen Navarra, 8th Collective Agreement (B) are -
Interest costs
– Compare to the competition, Navarra Agreement 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.
Products dominated business model
– Even though Navarra Agreement 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 - Volkswagen Navarra, 8th Collective Agreement (B) should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Navarra Agreement 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 (B) 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 bargaining power of channel partners
– Because of the regulatory requirements, Guido Stein Martinez, Carlos Escobar, Marta Cuadrado, Jose Ramon Pin Arboledas suggests that, Navarra Agreement 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.
Low market penetration in new markets
– Outside its home market of Navarra Agreement, firm in the HBR case study Volkswagen Navarra, 8th Collective Agreement (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Navarra Agreement is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Navarra Agreement needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Navarra Agreement to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Volkswagen Navarra, 8th Collective Agreement (B), is just above the industry average. Navarra Agreement 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 operating costs
– Compare to the competitors, firm in the HBR case study Volkswagen Navarra, 8th Collective Agreement (B) 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 Navarra Agreement 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Navarra Agreement 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.
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 Navarra Agreement supply chain. Even after few cautionary changes mentioned in the HBR case study - Volkswagen Navarra, 8th Collective Agreement (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Navarra Agreement vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Navarra Agreement 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 Agreement 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.
Opportunities Volkswagen Navarra, 8th Collective Agreement (B) | 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 (B) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Navarra Agreement is facing challenges because of the dominance of functional experts in the organization. Volkswagen Navarra, 8th Collective Agreement (B) 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Navarra Agreement in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
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. Navarra Agreement can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Navarra Agreement to increase its market reach. Navarra Agreement 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.
Developing new processes and practices
– Navarra Agreement 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.
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 Agreement can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Navarra Agreement can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Volkswagen Navarra, 8th Collective Agreement (B) 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.
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 Agreement can use these opportunities to build new business models that can help the communities that Navarra Agreement operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Navarra Agreement can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Navarra Agreement 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 (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Navarra Agreement to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Navarra Agreement 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Navarra Agreement 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 (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Agreement 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.
Threats Volkswagen Navarra, 8th Collective Agreement (B) 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 (B) are -
Regulatory challenges
– Navarra Agreement 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.
Increasing wage structure of Navarra Agreement
– 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 Agreement.
Consumer confidence and its impact on Navarra Agreement 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Navarra Agreement 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Volkswagen Navarra, 8th Collective Agreement (B), Navarra Agreement 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 .
Environmental challenges
– Navarra Agreement 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 Agreement can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Navarra Agreement is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Navarra Agreement 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.
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 Agreement needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Navarra Agreement business can come under increasing regulations regarding data privacy, data security, etc.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Navarra Agreement with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Navarra Agreement 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 (B) .
Weighted SWOT Analysis of Volkswagen Navarra, 8th Collective Agreement (B) 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 (B) 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 (B) 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 (B) 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 (B) 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 Agreement needs to make to build a sustainable competitive advantage.