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 - – there is backlash against globalization, increasing commodity prices, technology disruption, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, 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 -
Organizational Resilience of Navarra Agreement
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Navarra Agreement does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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 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.
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.
Ability to lead change in Leadership & Managing People field
– Navarra Agreement 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 Agreement in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
Highly skilled collaborators
– Navarra Agreement 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 Volkswagen Navarra, 8th Collective Agreement (B) HBR case study have helped the firm to develop new products and bring them quickly to 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 -
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Volkswagen Navarra, 8th Collective Agreement (B), in the dynamic environment Navarra Agreement has struggled to respond to the nimble upstart competition. Navarra Agreement has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Navarra Agreement has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 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.
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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Volkswagen Navarra, 8th Collective Agreement (B) 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 Agreement has relatively successful track record of launching new products.
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.
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 -
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.
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.
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 Agreement 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 Agreement 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.
Leveraging digital technologies
– Navarra Agreement 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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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 Agreement.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that 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.
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.
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.
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.
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.
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.
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.
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.
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 .
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.
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.
