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 - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, supply chains are disrupted by pandemic , increasing commodity prices,
competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, 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 -
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.
Training and development
– Navarra Agreement 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 (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Navarra Agreement 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 Agreement is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Volkswagen Navarra, 8th Collective Agreement (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Analytics focus
– Navarra Agreement 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.
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Navarra Agreement 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.
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.
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 -
High cash cycle compare to competitors
Navarra Agreement 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.
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.
Skills based hiring
– The stress on hiring functional specialists at Navarra Agreement 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.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Volkswagen Navarra, 8th Collective Agreement (B), it seems that the employees of Navarra Agreement 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.
Capital Spending Reduction
– Even during the low interest decade, Navarra Agreement 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.
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.
Slow to strategic competitive environment developments
– As Volkswagen Navarra, 8th Collective Agreement (B) HBR case study mentions - Navarra Agreement 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.
Aligning sales with marketing
– It come across in the case study Volkswagen Navarra, 8th Collective Agreement (B) 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 (B) can leverage the sales team experience to cultivate customer relationships as Navarra Agreement is planning to shift buying processes online.
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.
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 -
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.
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.
Learning at scale
– Online learning technologies has now opened space for Navarra Agreement 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.
Loyalty marketing
– Navarra Agreement 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.
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.
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 Navarra Agreement in the consumer business. Now Navarra Agreement can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Navarra Agreement 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 Agreement to hire the very best people irrespective of their geographical location.
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.
Building a culture of innovation
– managers at Navarra Agreement 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.
Creating value in data economy
– The success of analytics program of Navarra Agreement has opened avenues for new revenue streams for the organization in the industry. This can help Navarra Agreement to build a more holistic ecosystem as suggested in the Volkswagen Navarra, 8th Collective Agreement (B) case study. Navarra Agreement can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
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.
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.
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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Navarra Agreement will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Navarra Agreement has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Navarra Agreement 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.
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.
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.
Stagnating economy with rate increase
– Navarra Agreement 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.
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 Navarra Agreement in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Navarra Agreement can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.